Net 60 Payment Terms: How They Work and When to Offer Them

Net 60 means the buyer has 60 days from the invoice date to pay the full amount, with no early-payment discount. Put the invoice date on the day you issue it, add 60 days, and that result is your due date. If you invoice on 3 March, the payment is due 2 May (or 3 May, depending on whether you count from the invoice date or the day after — more on that below). "Net" refers to the net amount, i.e. the total after any deductions; here there are none, so the buyer pays the invoice total.

That is the whole mechanic. The interesting part is the cost.

What Net 60 actually costs you

Net 60 is a loan you make to your customer, interest-free. You have already delivered the work and paid your own costs. The money arrives two months later.

Say you finish a $4,000 project on 1 April and invoice it that day. You pay $1,200 in subcontractor costs in April, out of pocket. On a Net 30 term you would typically see the $4,000 around 1 May. On Net 60 it arrives around 31 May, assuming the client pays on time — and plenty do not.

That 30-day gap is not a rounding error for a small business. If you carry four projects of that size at once, you are floating roughly $16,000 in receivables instead of $8,000, and you are funding a client's cash flow with your own working capital. The buyer, meanwhile, gets to hold cash for two extra months for free.

The trade is only worth making when the client is large, reliable, and worth the wait — or when the alternative is losing the work entirely.

Photo by Towfiqu barbhuiya on Unsplash

When Net 60 is normal, and when it hurts you

Net 60 shows up most in industries with long supply chains and slow internal approval: manufacturing, construction subcontracting, government work, and buying departments at large corporations. Big buyers often set terms unilaterally in a vendor agreement rather than negotiate them, and invoice approval can pass through several people before payment is released.

Medium and small buyers increasingly ask for Net 60 too, which is where it gets dangerous. A freelancer or a two-person studio on Net 60 can be waiting on money that was already spent on rent, tools and subcontractors. In most cases Net 30 is the default term for small and mid-sized B2B work, and Net 15 or due-on-receipt is common for smaller jobs with individual clients.

When to push back on Net 60:

• Your own suppliers expect faster payment than your client does.
• The invoice is a large share of your monthly revenue.
• You have no cash buffer to cover two months of costs.
• The client has a history of paying late on top of the long term.

When it can be reasonable to accept it:

• The buyer is a large, creditworthy organisation that genuinely cannot move faster.
• The contract is big enough that even a delayed payment beats not having the work.
• You can negotiate a middle ground — Net 45, a deposit up front, or milestone billing so cash comes in stages.

A deposit or milestone schedule is usually the cleanest fix. Splitting a 60-day project into two or three invoices, each with its own due date, gets you paid along the way instead of once at the end.

Ready to try it? Create a professional invoice in under two minutes with Invoala's free invoice generator, no sign-up and no watermark.

Example: invoicing $2,400 on Net 60 with 8% sales tax

Say you invoice $2,400 for consulting work with 8% sales tax, issued on 15 September, on Net 60 terms.

• Subtotal: $2,400.00
• Sales tax at 8%: $192.00
• Invoice total: $2,592.00

Your due date is 14 November — 60 days after 15 September. That number goes on the invoice, in words if you have room, because "Net 60" alone invites interpretation. If the client asks for a payment date of 13 November or 15 November because of how they count, it is worth checking the contract wording now rather than arguing at day 61.

Note that the sales tax is calculated on the subtotal, and the buyer owes the full $2,592 within the 60 days. Whether you must charge tax, and at what rate, depends on your country, your registration status and where the customer is — check your local tax authority rather than assuming. Some jurisdictions also treat the tax portion differently for late-payment purposes.

If the client typically pays on day 75 rather than day 60, your real terms are Net 75, whatever the paper says. Track what actually happens, not what was agreed.

Photo by Dimitri Karastelev on Unsplash

Getting the due date right on the invoice

Most invoicing disputes over Net 60 come down to arithmetic, not intent. A few rules that hold in most places:

• State the invoice date explicitly and make sure it matches the day you send it.
• Write the due date as an actual calendar date, not just "Net 60".
• Decide whether the clock starts on the invoice date or the following day, and put that in your contract.
• Holidays and weekends can shift the practical payment date — if the due date lands on a non-banking day, expect payment on the next working day.
• Include the terms on the invoice itself ("Payment due 14 November — Net 60 from invoice date"), so the buyer's accounts payable team has no reason to query it.

Send the invoice as early as your contract allows. If work is delivered on 1 September but you invoice on 15 September, you have just handed the client 14 free days. A searchable step-by-step guide to creating an invoice is worth keeping open the first few times you do this; after that it becomes routine.

You will also want the invoice to look like something an accounts payable department expects: numbered, dated, itemised, with the total clearly marked. If you are building one from scratch, free invoice templates save you from guessing at the layout.

Setting Net 60 terms up in Invoala

Invoala is a free invoice generator that works without sign-up and without a watermark on the PDF. For a Net 60 invoice specifically, the useful part is that the due date is a field you fill in, not something you calculate by hand at 11pm.

1. Go to the free invoice generator and fill in your business details and the client's.

2. Add line items for the work, plus the subtotal, any tax and the total.

3. Enter the invoice date, then set the due date to invoice date plus 60 days — write the calendar date in the terms or notes field as well.

4. Add your payment details, invoice number and any reference the client's finance team requires.

5. Download the A4 PDF and send it. No account needed, no branding added to the document.

Because each new invoice starts from a blank form, keep a copy of the previous one as a reference so your numbering stays sequential — accounts payable teams notice gaps and duplicates.

Chasing payment after day 60

Net 60 invoices need a follow-up habit, because two months is long enough for an invoice to fall out of someone's queue — or never enter it.

A workable pattern: confirm receipt a few days after sending, confirm it is in the approval queue at around day 30, and follow up formally a few days before the due date. After day 60, escalate on a schedule you set in advance and stick to. Escalating early and politely beats escalating late and angrily, and most late payments are administrative rather than deliberate.

If you would rather not track dates by hand, automated payment reminders take the scheduling off your plate, and invoice payment tracking tells you at a glance which invoices are paid, due or overdue — which is the real answer to whether Net 60 is working for you or against you.

A practical rule

Default to Net 30. Offer Net 60 when the buyer is large, reliable, and either cannot or will not move, and when you can afford to wait — or when you can offset it with a deposit, milestone billing, or a slightly higher price to cover the cost of the delay. Never offer Net 60 simply because a client asked for it and you wanted to seem easy to work with. Two months of your own money is a real concession; price and plan for it accordingly.