What are net terms?

Net terms are how long a buyer has to pay after invoicing. Net 30 means payment is due thirty days from the invoice date, and retail terms commonly run to net 60 or net 90. Terms may include an early-payment discount, written as 2/10 net 30 — two percent off if paid within ten days.

Terms decide the working capital a wholesale account consumes. Paying a supplier on net 30 while a retailer pays you on net 90 means funding sixty days of goods for every cycle.

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