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Net 30 payment terms gives buyers 30 calendar days to pay an invoice, usually measured from the invoice date. For retailers buying wholesale stock, that window gives them time to receive goods and start selling them before payment is due.
Businesses still need cash to cover their own bills while they wait. A late or unpaid invoice can leave them short of money for their next inventory order.
This guide explains how net 30 works, how to set clear payment terms, and how to reduce the risk of unpaid invoices when offering customers extra time to pay.
What is net 30?
Net 30 is a form of short-term trade credit commonly used in business-to-business (B2B) transactions. The seller supplies goods or services and gives the buyer 30 calendar days to pay. “Net” is the full invoice amount due.
Trade credit lets buyers finance purchases through their suppliers and begin selling inventory before payment is due. In the Federal Reserve Bank’s 2026 Report on Employer Firms, 19% of US businesses with up to 499 employees surveyed in 2025 reported regularly using trade credit.
The buyer owes payment by the deadline even if the products have not yet sold. With consignment, the supplier retains ownership of the goods until they sell, then receives payment under the consignment agreement.
How do net 30 days payment terms work?
Net 30 gives the buyer 30 calendar days from the invoice date to pay in full. Weekends and holidays count toward those 30 days. For example, an invoice dated April 1 has a May 1 payment deadline when the agreement calculates payment this way.
Agree on the timing before the sale and write any exceptions into the contract:
- Starting date. Specify whether the 30 days run from the invoice date, invoice receipt, or delivery.
- Weekend and holiday deadlines. State whether a due date falling on a nonbusiness day moves to the next business day.
- Grace periods. Explain whether buyers have extra time after the due date before late fees begin.
Print the actual payment deadline on the invoice so the buyer can see exactly when payment is due.
If you plan to charge late fees, agree on the amount or rate and when charges begin before the sale. Your ability to enforce them depends on applicable state law and the contract.
For sales of goods, Uniform Commercial Code (UCC) § 2-718 requires agreed damages to be reasonable in light of the expected or actual harm, the difficulty of proving loss, and the availability of an adequate remedy. Unreasonably large penalties are unenforceable. Have a lawyer review the terms before signing an agreement.
An example of net 30 payments
Say a retailer buys $1,000 of inventory from a wholesaler. The wholesaler issues an invoice dated March 1 with 2/10 net 30 terms. This allows a 2% discount for early payment within 10 days, or full payment within 30 days. Both periods run from the invoice date.
| Payment timing | Amount due |
|---|---|
| By March 11, within the 10-day discount period | $980—a $20 saving |
| March 12–31, after the discount expires | $1,000 |
| From April 1, once payment is overdue | $1,000 plus any agreed, legally enforceable late charges |
The retailer can inspect and begin selling the inventory during this period. Payment is due by March 31 regardless of how much stock has sold.
How to manage net 30 payment terms
Follow these four steps to assess buyers’ creditworthiness and manage net 30 payments:
- Decide who qualifies
- Create an agreement
- Consider an early payment discount
- Send regular payment reminders
1. Decide who qualifies
Review a buyer’s payment history before extending credit. Check their business credit report for overdue accounts and ask supplier references whether they pay on time. For existing customers, review how promptly they’ve paid your previous invoices.
Set a credit limit that caps the customer’s total unpaid balance. A smaller initial limit lets you assess their payment habits before approving larger orders. Request upfront payment when you have insufficient information to assess the risk.
Confirm the agreed terms in writing for every order, including repeat purchases. Record the payment deadline and any changes to the customer’s credit limit.
2. Create an agreement
To enforce a US sale of goods worth $500 or more, you generally need a written record signed by the customer. UCC § 2-201 sets out this rule and its exceptions, including certain written confirmations between merchants.
Record these details in your agreement:
- Products, quantities, and prices
- The starting date for the 30-day period and payment deadline
- Any early payment discount and its conditions
- Any lawful late fees and when they begin
- How returns and invoice disputes are handled
Prepare an invoice that reflects those terms and explains how to pay. Have a lawyer review the agreement before signing.
To create a B2B draft order with payment terms in Shopify:
- Go to Orders > Drafts and click Create order.
- Add the B2B customer, company location, and products.
- In the Payment section, select Payment due later, then choose net 30 from the payment terms menu.
- Save the draft order, then send the invoice when it’s ready.
Other Shopify B2B payment terms include:
- Net 7, 15, 45, 60, or 90: Payment within the selected period.
- Due on fulfillment: Payment after all items are fulfilled.
- Fixed date: A specific deadline for an individual draft order.
Immediate payment is the default when no payment terms are assigned. For B2B orders placed through your online store, Shopify counts net terms from the order date. Check that the dates match your written agreement.
3. Consider an early payment discount
An early payment discount gives buyers a financial incentive to settle invoices sooner. With 2/10 net 30, the buyer receives a 2% discount for paying within 10 days. Otherwise, the full amount is due within 30 days.
On a $1,000 invoice, you give up $20 in exchange for earlier payment. Check whether that reduction leaves enough profit after your costs.
4. Send regular payment reminders
Send manual reminders before the due date, such as seven days and one day beforehand. Include the outstanding balance, deadline, and payment instructions.
Shopify’s scheduled payment reminders can run on the due date or afterward. You must enable them:
- Go to Settings > Notifications.
- Under Orders, find Payment reminder and click Manage payment reminders.
- Click Add payment reminder.
- Choose the due date or an overdue interval.
- Click Turn on.
You can schedule up to five reminders, with overdue reminders sent up to 30 days after the deadline.
If payment becomes overdue, follow up on the existing invoice and apply only late charges permitted by your agreement and applicable law.
Advantages of net 30 terms
Buyers receive interest-free supplier credit when the agreement carries no financing charge. Offering that payment flexibility via net 30 can help attract customers:
- Make first orders easier to fund. A retailer can receive stock and begin selling it before the invoice is due, keeping cash available for other expenses.
- Compete for B2B orders. In Atradius’s 2025 survey of 240 US businesses, nearly half of B2B sales were made on credit, with payment terms averaging 45 days from invoicing. Offering net 30 gives buyers who expect credit an alternative to paying upfront.
- Encourage repeat purchases. TreviPay’s 2026 B2B buyer report, based on a survey of 550 business buyers across five markets, identified access to trade credit and installments as factors that increased buyers’ likelihood of purchasing from a supplier again.
Disadvantages of net 30 terms
There are also drawbacks to offering net 30 payment terms:
- More working capital needed. You need cash to cover inventory and operating expenses while invoices are outstanding. For example, a $10,000 order with $6,000 in upfront product and fulfillment costs requires you to finance that $6,000 until payment arrives. Several unpaid orders can stretch cash reserves, even when each sale is profitable.
- Cash flow problems. Buyers can miss their deadlines, leaving your own bills due before the money arrives. In Atradius’s 2025 US survey, overdue invoices accounted for 43% of total credit-based B2B invoice value. Budget for payment delays as well as the agreed 30-day period.
- Less cash available for growth. In a 2025 Shopify survey of store owners, 79% said they used profits to self-fund growth.* Waiting for customers to pay can postpone the next inventory purchase or marketing campaign, even when your accounts show a profit.
- Time spent assessing buyers. Reviewing credit reports and checking references adds work before you approve an account. You also need to review existing customers when they request higher limits or start paying late.
- Time spent collecting payment. Automated reminders handle routine follow-ups. Your team still needs to resolve disputed invoices and contact customers with overdue payments.
Alternatives to net 30 payment
Choose terms based on when your own bills are due and how much credit you can extend to the buyer. These are alternatives to net 30.
| Payment term | Due date | Use case |
|---|---|---|
| Net 0, due on receipt | Immediately upon receipt of the invoice | Small, one-off orders requiring prompt payment |
| Prepayment | Before work begins or goods ship | New buyers with limited credit history |
| Net 15 | 15 calendar days after the agreed starting date | Regular inventory orders that buyers can resell quickly |
| Net 60 | 60 calendar days after the agreed starting date | Established buyers with longer inventory turnover |
| Net 90 | 90 calendar days after the agreed starting date | Seasonal wholesale orders, when the seller can finance the longer wait |
| Deposit upfront, balance on delivery | Part before production or shipment, the rest upon delivery | Custom orders with upfront material costs |
| Card on file charged at fulfillment | When the order is fulfilled, with the buyer’s authorization | Repeat wholesale customers who prefer paying by card |
| Installments | Several agreed dates or milestones | Large equipment purchases paid in stages |
Specify the starting date in the agreement, which is usually the invoice date. Net 0 makes payment due when the invoice arrives, which can be after delivery. Prepayment requires the buyer to pay before work begins or goods ship.
Accept deferred payments with Shopify
Assess three factors before offering net 30:
- Working capital capacity. Forecast whether you can cover order costs and regular bills until customers pay. Allow extra cash for late payments.
- Buyer creditworthiness. Review payment history and supplier references. Offer smaller credit limits to buyers with limited trading history.
- Order value. Compare the order with the buyer’s existing unpaid balance and credit limit. A deposit can reduce your exposure on a large or custom order.
Offer net 30 to a small group of reliable customers first. Track how quickly they pay and how much cash you have available before extending credit to more accounts.
Shopify B2B offers net payment terms and payment reminders on the Basic, Grow, Advanced, and Plus plans. You can assign terms to company locations or individual draft orders. According to Shopify’s B2B plan comparison, the Plus plan also allows deposit requirements, partial payments, and payment requests for individual fulfillments.
B2B customers can also save a credit card when you accept Shopify Payments. Collect payment manually or configure a Shopify Flow workflow to charge the saved card when payment becomes due.
Once payments arrive, eligible merchants can manage business funds and spending through Shopify Balance. To be eligible for Balance, the account representative must have a physical residential address in the US or Puerto Rico and a valid SSN or ITIN.
The business needs an eligible physical operating address and an active Shopify plan. Shopify Payments, two-step authentication, and the applicable business and identity checks are also required.
*Based on a 2025 survey of 500 Shopify merchants conducted in English across Australia, Canada, the United Kingdom, Ireland, New Zealand, and the United States. Respondents were established merchants with more than two years on the platform. Results reflect the experiences of this specific sample and may not be representative of all merchants.
Net 30 payment terms FAQ
What is the most common net payment term?
Net 30 is one of the most common net payment terms for small businesses. It gives buyers 30 calendar days to pay in full, usually from the invoice date. Buyers and sellers can agree on a different start date, such as the delivery date.
What are the 2% net 30 payment terms?
Terms labelled “2% net 30” may refer to a 2% early-payment discount, with full payment due within 30 days. The discount deadline must also be specified. For example, 2/10 net 30 gives buyers a 2% discount for paying within 10 days. Otherwise, the full invoice amount is due by day 30.
Does net 30 only include business days?
No. Net 30 counts 30 calendar days, including weekends and holidays.
What are the downsides of net 30 for sellers?
Sellers cover order costs while waiting for payment, which reduces cash available for other expenses and growth. Late payments can extend that wait, and unpaid invoices create losses. Assessing buyers, tracking balances, and collecting overdue payments also take time.
Is net 30 legally binding?
Net 30 can be legally binding when the buyer and seller agree to it in an enforceable contract. For US sales of goods worth $500 or more, UCC § 2-201 generally requires a signed written record, subject to exceptions. Applicable state law determines enforceability.
