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What do NET 30 and NET 15 mean on an invoice?

Author: 
Elie Toubiana
 | 
Date: 
September 21, 2022

Numerous factors influence whether you are paid on time. While it would be ideal if every client paid you the moment they received an invoice, that is not thecae. You can quickly generate different types of invoices through Invoice Builder.

One of these factors is invoice payment terms, such as when and how a client should pay you. They aid in ensuring that you are paid in full and on time. However, to avoid cash flow issues and encourage faster payment, one of the most important decisions is how long a client has after receiving a bill to pay you.

The most common payment terms service providers use are NET 10, NET 15, NET 15 and NET 30.

What Does Net Mean on an Invoice?

On an invoice, the net can mean two different things.

  1. Net payment terms are possible. For example, "net 15" indicates that full invoice payment is due within fifteen days of the invoice date.
  2. Net can also refer to the total amount owed on an invoice. The net value of goods or services itemized on an invoice is their cost, less applicable taxes or fees. The net value informs the customer or client of the amount they will pay for an item or service before tax.

Net 30 on an Invoice

Net 30 is a payment term. It is included in an invoice's payment terms. It denotes when the vendor desires payment for the service or product provided. Net 30means the vendor wishes to be paid within 30 days of the invoice date.

A credit term is net 30. The vendor first sends the products or provides the service and then requests payment by a specific date.

Net 15 on an Invoice

Net 15 on an invoice means full payment is due within 15 days of the invoice date, at the latest.

Net 15 is a payment term used by businesses. Instead of asking a customer to pay immediately after receiving a product or performing a service, the vendor gives the customer time to pay the invoice. Net 15 means that the client has 15 days to pay the invoice.

The most used payment terms are net 10, 30, and 60. Net 15 is a relatively short period. A small business may use these terms to refer to new or existing clients who have previously failed to pay their invoices on time.

Conclusion

Payment terms such as net 30 are critical to include on an invoice because they specify when you expect to be paid. This eliminates any confusion that could lead to late payments. It also improves your chances of receiving payment on time. This improves the cash flow of a small business and its financial position. Instead of "net 30," consider writing "payment is due in 30 days" in your payment terms. This clarifies the situation for the customer. Your payment terms should always be as clear and concise as possible and try to include consistent terms invoice to invoice.

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