Net 30 Payment Terms Calculator: Due Dates and Fees

What "2/10 Net 30" is really worth

The famous result hiding in these terms: skipping a 2/10 Net 30 discount costs the buyer 36.7% annualized. You're "borrowing" for 20 extra days at 2% of the invoice: an APR no sane CFO pays if any credit line is cheaper. This calculator runs that conversion for any discount and terms, plus late-fee accrual, so both sides of an invoice can see what the paper actually costs.

Sellers: terms are a pricing decision

Every day of Net terms is an interest-free loan you're extending. Net 60 on $50k/month of invoices means $100k permanently parked in receivables: money you can't use, at your cost of capital. Early-pay discounts buy that float back but at the same brutal APR the buyer enjoys. Often the better lever: shorter terms for new clients, deposits on projects, and the standard 1.5%/month late fee stated on every invoice (uncharged fees train slow payers).

Buyers: the discount is usually free money

If you have the cash or credit under ~30% APR, take every early-pay discount offered: few investments return 36% risk-free. The exception is genuine cash scarcity, where the expensive float is still cheaper than a missed payroll.

The general formula (works for any discount, not just 2/10 net 30)

The 36.7% figure comes from one formula: annualized cost = [discount% ÷ (100% − discount%)] × [360 ÷ (net days − discount days)]. Swap in different terms and the number moves fast, and not proportionally. 1/10 net 30 (half the discount) isn't half the APR by coincidence: it's [0.01/0.99] × [360/20] = 18.2%. But 2/10 net 60, the same 2% discount as the famous case with just a longer net period, drops to [0.02/0.98] × [360/50] = 14.7%. Stretching the net period is a bigger lever on the buyer's effective rate than trimming the discount percentage. A seller offering "2% but Net 60 instead of Net 30" is quietly cutting the discount's real value by more than half while the headline "2%" looks unchanged.

EOM and ROG dating: the clock this calculator assumes you're using

"Net 30" by default starts the clock on the invoice date, and that's what the formula above assumes. Two common variants change the math entirely. EOM (end-of-month) terms like "2/10 EOM" start both the discount and net clocks on the last day of the invoice month, not the invoice date itself: an invoice cut on the 3rd effectively gets up to 27 extra float days before the 10-day discount window even opens. ROG (receipt of goods) dating starts the clock when the buyer receives the shipment instead, common on freight-heavy orders where transit alone runs a week or two. Run either through the standard formula using the invoice date instead of the real clock-start date and the APR comes out wrong in the buyer's favor. Check which dating convention is on the PO before assuming Net 30 means what it usually means.

When the stated late fee doesn't survive contact with the law

1.5%/month sounds like flat 18% APR, but if it compounds monthly (accruing on unpaid fees, not just principal) the effective annual rate is closer to 19.56%: (1.015)^12 − 1. Most invoice templates don't specify simple vs. compounding, and that gap is exactly what gets disputed in collections. The bigger risk is usury: a handful of states cap contractual interest below 18%, and charging above the cap without a stated, signed agreement can make the fee unenforceable rather than just capped down. State the exact rate, in writing, on the invoice or contract before the work starts. Leave it unstated and courts often default you to the jurisdiction's statutory rate instead, which is usually lower. Our invoice generator keeps that language on the template automatically.

What Does Net 30 Mean?

Net 30 means the full invoice amount is due 30 calendar days after the invoice date. Weekends and holidays count, so an invoice dated March 3 is due April 2. It is not 30 business days, and the clock starts on the invoice date, not the day the goods arrive. Net 15, Net 45, and Net 60 work exactly the same way with a different day count.

Net 30 Due Date Table

Due dates trip people up at month boundaries because months run 28 to 31 days. Exact due dates for four common invoice dates:

If a due date lands on a Saturday or Sunday, most companies accept payment the next business day, but the term itself grants no grace. Pay the Friday before when the vendor reports your payment history.

Net 30 Vendor Accounts and Business Credit

Many buyers open net 30 vendor accounts less for the goods than for the credit file. Suppliers that report to Dun and Bradstreet create tradelines, and once enough payment experiences hit your file (three is the commonly cited minimum), your company generates a PAYDEX score on a 0 to 100 scale. An 80 means you pay exactly on time. Scores of 90 and up require paying early, roughly 20 days ahead of terms, so a Net 30 invoice needs to clear by about day 10. Use the calculator above to schedule those early payments, and put clean terms on your own invoices with the free invoice generator so your clock starts the day the work ships.

Should You Borrow to Take the Discount?

The 36.7% figure raises the obvious next question: is the discount still worth taking when you have to borrow the cash? Usually yes. On a $10,000 invoice at 2/10 Net 30, the discount saves $200 and you pay $9,800 on day 10. Borrowing that $9,800 for the 20 days you gave up costs about $64 on a 12% APR credit line, which nets you about $136. The rule: borrow and take the discount whenever your financing rate sits below the discount's annualized cost, 36.7% in this case. Sanity-check the raw discount math with the discount percentage calculator before you commit the cash.

Stated Terms vs When Clients Actually Pay

Net 30 on paper rarely means 30 days of cash. Clients on Net 30 terms commonly pay around day 45 to 50, and that gap is working capital you have to carry. The math is DSO times daily revenue: an agency billing $30,000 a month whose receivables sit at 47 days is floating roughly $47,000 at any given moment, $1,000 a day times 47. That float is the real price of offering terms, and it belongs in your pricing, not your patience. If you sell physical goods on terms, bake the carrying cost into your wholesale price instead of absorbing it.

Related tools

Set your rates so waiting doesn't hurt with the billable hours calculator, charge correct late fees via the invoice-ready terms in our free invoice generator, and see receivables' effect on survival in the break-even calculator.