If you’ve ever run a small business or worked with suppliers, you’ve probably come across the term Net 60 payment terms.
It sounds simple, but if you’re new to managing payments and invoices, it can feel a bit unclear.
We’re breaking it down into plain language.
What Are Net 60 Payment Terms?
Net 60 payment terms mean that the buyer has 60 days from the invoice date to pay the seller.
So, if a service was delivered on March 1st and the invoice was sent the same day, payment would be due by April 30th.
It gives the buyer more time to hold onto cash, which can help with managing inventory or cash flow. For the seller, it can offer a competitive edge but might delay incoming revenue.
Net 60 Meaning in Business
When we talk about net 60 meaning in a business context, we’re referring to trust and flexibility.
These terms are common in B2B transactions, especially when building long-term relationships. It’s a mutual agreement that the buyer will pay, just not right away.
Pros and Cons of Terms Net 60
Pros for Buyers:
- Extra time to pay invoices
- Improves cash flow flexibility
- Helps manage multiple supplier payments
Cons for Sellers:
- Slower cash inflow
- Higher risk of delayed or missed payments
- May require additional follow-ups or credit checks
How Net 60 Days Compare to Other Terms
Net 60 days is just one of many terms you might encounter.
For instance:
- Net 30: Payment due in 30 days
- Net 90: Payment due in 90 days
Some companies may offer early payment discounts like “2/10 Net 30,” which means you get a 2% discount if you pay within 10 days.
Teamship’s Take on Payment Flexibility
At Teamship, we understand how important flexible terms like Net 60 payment terms can be for both sides of the supply chain.
Whether you’re a 3PL managing multiple clients or a brand juggling vendor payments, we help simplify everything, from billing to operations, all in one place.
Teamship offers a centralized solution that supports all your backend processes, including billing terms like Net 60.
Grow without the usual hurdles. Reach out for a quick overview of Teamship WMS.
Frequently Asked Questions
1. Do Net 60 payment terms include weekends and holidays?
Yes, Net 60 typically counts calendar days, not business days. That means weekends and holidays are included unless stated otherwise in the agreement.
2. Can Net 60 terms be negotiated?
Absolutely. Businesses often negotiate terms based on relationship strength, credit history, or order volume. You may be able to shift to Net 30 or Net 90 depending on your needs.
3. How do Net 60 terms affect accounting and cash flow forecasting?
For sellers, delayed payments require better cash flow planning. It’s important to track receivables closely. For buyers, it provides a larger payment window, which can ease short-term cash stress.