What Is Net 60? Payment Terms Explained

Net 60 means the full invoice amount is due within 60 calendar days of the invoice date. It is a longer payment window than the more common Net 30, and it appears most often in transactions involving larger order sizes, established buyer-seller relationships, or industries where extended payment cycles are standard practice.

How Net 60 Works

The mechanics are identical to Net 30, just with a longer window. An invoice dated April 1 with Net 60 terms is due May 31, which is 60 calendar days later. As with Net 30, those days are traditionally calendar days unless the contract explicitly specifies business days.

You can calculate the exact due date for any Net 60 invoice using the Net 60 Calculator.

When Net 60 Is Used

Net 60 terms are common in several contexts. Large retailers and enterprise buyers often impose Net 60 or longer terms on their suppliers as a matter of standard procurement policy; the buyer's size gives them the leverage to do so. Manufacturing and wholesale supply chains frequently use Net 60 because goods need to be received, inspected, and sometimes resold before payment is processed.

Government contractors in the United States are subject to the Prompt Payment Act, which sets default payment terms of 30 days for most federal contracts. However, subcontractor agreements further down the chain sometimes carry Net 60 terms.

Net 60 and Cash Flow

For sellers, Net 60 means waiting two months to be paid for work already completed or goods already delivered. This is a real cash flow burden for small businesses and independent contractors. Before agreeing to Net 60 terms, consider whether your operating reserves can cover 60 days of float, and whether the transaction size justifies it.

Options to mitigate the impact include offering an early payment discount (for example, 1/10 Net 60, which is a 1% discount for payment within 10 days), invoice factoring, or simply negotiating shorter terms before signing the contract. Net 60 is much easier to negotiate before you take on the work than after.

Net 60 vs Net 30 vs Net 90

Net 30 is the most common standard for routine business transactions. Net 60 is appropriate when the buyer's procurement process legitimately requires more time, or when the transaction value is large enough to make the extended cycle reasonable. Net 90 pushes the window to three months and is typically reserved for large enterprise deals or specific industries like publishing. See the Net 90 guide for more.

FAQ

Is Net 60 calendar days or business days?

Calendar days, by default. If a contract specifies business days it will say so explicitly. Sixty business days works out to approximately 84 calendar days, nearly three calendar months.

Can I negotiate Net 60 terms down to Net 30?

Yes, and it is worth trying before signing. Large buyers often have standard Net 60 templates but may accept shorter terms for smaller vendors, preferred suppliers, or when the seller offers an early payment discount.

What is 2/10 Net 60?

It means the buyer can take a 2% discount if they pay within 10 days; otherwise the full amount is due in 60 days. The annualised cost of not taking that discount is significant. It is generally in the buyer's financial interest to pay early when the discount is available.