Glossary

Net 60

Pay in full within 60 days of the invoice.

Payment terms allowing 60 days. Common with larger customers and institutions; they increase the working capital you must carry and make receivables financing more expensive because fees accrue per period outstanding. Some customers offer supply-chain financing programs that pay you early for a fee; compare that fee with factoring.

How it appears in a contract

Customer purchase-order terms; sometimes non-negotiable for large buyers.

Worked example

$50,000 a month of net-60 sales means about $100,000 permanently outstanding, roughly two months of your revenue financing the customer.

Illustrative figures on stated assumptions; not quotes.

What to ask

• Does the customer offer an early-payment program, and at what cost?
• Will a factor accept this customer at net-60?
• Can I price the wait into the invoice?

Related terms

Net 30 · Invoice factoring · Working capital · all terms