Net 60 and Net 90 Payment Terms: How to Negotiate
Net 60 means payment is due 60 days after the invoice date. Learn what net 60 and net 90 cost you, how to negotiate shorter terms, and invoice wording to use.
Quick answer: Net 60 means the full invoice amount is due 60 calendar days after the invoice date; net 90 means 90 days. These long payment terms are common with large companies but strain a freelancer's cash flow. Before accepting net 60, negotiate a deposit, milestone billing, an early payment discount or a higher price, and make sure your invoice meets every approval requirement.
You win a big client, then the supplier agreement arrives: "payment terms net 90". For a freelancer or small agency that is three months of work before any money arrives. This guide explains what net 60 and net 90 mean, why buyers use them, what they really cost you with the arithmetic shown, and how to negotiate. For the basics of net 30 and due on receipt, see our guide to invoice payment terms. You can set any terms and due date in our free invoice generator.
What does net 60 mean?
Net 60 is a payment term meaning the buyer must pay the net (full) amount of the invoice within 60 days. Unless the contract says otherwise, the count starts on the invoice date and uses calendar days. An invoice dated 1 October is due on 30 November.
Variations you will see in supplier agreements:
| Term | Meaning | Invoice dated 5 March is due |
|---|---|---|
| Net 30 | 30 days from invoice date | 4 April |
| Net 60 | 60 days from invoice date | 4 May |
| Net 90 | 90 days from invoice date | 3 June |
| Net 60 EOM | 60 days from the end of the invoice month | 30 May |
| 2/10 net 60 | 2% discount if paid in 10 days, otherwise full amount in 60 | 15 March (discount) or 4 May |
| Net 60 from receipt | 60 days from when the buyer logs a valid invoice | Depends on submission date |
Whatever the variation, write the actual due date on the invoice so nobody has to count days.
Why do large companies use net 60 and net 90?
- Working capital: holding cash longer improves the buyer's own cash position.
- Batch payment runs: accounts payable teams often pay on fixed cycles, such as twice a month.
- Approval processes: invoices must be matched to purchase orders and goods or service receipts before payment.
- Standard policy: procurement may apply the same terms to every supplier regardless of size.
None of these reasons means the terms are non-negotiable. Small suppliers often get shorter terms simply by asking, especially before the contract is signed.
What net 60 and net 90 really cost you
Waiting longer has a real cost: either you borrow to cover the gap, or you use savings that could earn interest. A simple way to measure it:
Cost of waiting = invoice amount x annual interest rate x extra days / 365
Worked example: net 90 vs net 30
You invoice $10,000. Your business line of credit costs 12% a year. Net 90 instead of net 30 means 60 extra days of waiting.
- $10,000 x 12% = $1,200 a year in interest.
- $1,200 x 60 / 365 = $197.26 extra financing cost.
To stay whole, you could quote about $10,200 for net 90 terms, or offer the $10,000 price only on net 30. On a recurring monthly retainer, the cost repeats, and three invoices are outstanding at any one time under net 90 compared with one under net 30. That is three months of revenue you are effectively lending the client.
The bigger risk is not interest but late payment on top of long terms. Surveys of small businesses regularly report large shares of invoices running overdue; see our roundup of late payment statistics. Map the timing in a cash flow forecast before you agree.
How to negotiate net 60 payment terms
1. Ask before you sign
Payment terms are easiest to change during contracting. Ask: "As a small supplier, can we agree net 30? Many of your vendor programmes allow shorter terms for small businesses." Some large companies have small-supplier policies; it costs nothing to ask.
2. Offer a trade, not a complaint
- Deposit: accept net 60 on the balance if 30% to 50% is paid upfront.
- Milestones: split the project into stages so you invoice earlier and more often (milestone payments).
- Early payment discount: offer 2/10 net 60 so the client can choose to pay quickly.
- Price adjustment: quote a lower price for net 30 and a higher one for net 60 or 90.
3. Know the cost of the discount you offer
An early payment discount looks small but is expensive. For 2/10 net 60, the client saves 2% for paying 50 days early. The implied annual rate is 2/98 x 365/50 = 0.0204 x 7.3, about 14.9%. That is attractive for a client with spare cash, and it may be cheaper for you than borrowing, but compare it with your own financing costs. Our early payment discount guide explains the maths.
4. Check for supplier finance options
Some large buyers run supply chain finance or dynamic discounting programmes that let suppliers get paid early for a fee. Compare the fee with factoring or a line of credit; see invoice financing vs line of credit.
When can net 60 or net 90 make sense?
Long payment terms are not always a deal-breaker. They can be worth accepting when:
- The client is reliable and large. A company that pays exactly on day 60 every time is easier to plan around than a small client on net 15 who pays whenever it remembers.
- The work is recurring. After the first long gap, a monthly retainer settles into a steady rhythm, with one payment arriving each month.
- You have a cash buffer. If you hold several months of expenses in reserve, the delay costs you some interest rather than putting your business at risk.
- The relationship opens doors. A recognisable client can lead to referrals and case studies that are worth more than the financing cost.
Even then, protect yourself: limit how much unpaid work you allow to build up, pause work if an invoice goes overdue, and review the arrangement each year.
Laws that limit long payment terms
- UK: the Late Payment of Commercial Debts (Interest) Act 1998 gives businesses the right to statutory interest at 8% above the Bank of England base rate plus fixed compensation on late B2B invoices; see the GOV.UK guidance. The government has also proposed a 60-day maximum for large companies paying small suppliers; read our UK late payment law 2026 guide for the status of that Bill.
- EU: the Late Payment Directive (2011/7/EU) says B2B terms longer than 60 days must be expressly agreed and not grossly unfair to the creditor, and public authorities should generally pay within 30 days.
- US: there is no general federal cap on B2B terms. Federal agencies are subject to the Prompt Payment Act, and some states have prompt-payment laws for public contracts or construction. Otherwise, the contract governs.
Even where long terms are legal, a clear late fee clause in your contract gives you leverage once the due date passes.
How to make sure net 60 does not become net 120
With long terms, the clock often only starts when the buyer accepts your invoice. Any error can restart it.
- Get the purchase order number before you start work and put it on every invoice.
- Use the exact legal entity name and billing address from the supplier agreement.
- Complete vendor onboarding (tax forms, bank details, supplier portal registration) early.
- Submit through the required channel, whether email inbox, portal or e-invoicing network.
- Confirm receipt and ask for the expected payment run date.
- Diary a reminder a week before the due date and follow up the day after it passes with a polite, specific reminder.
Net 60 invoice wording examples
- "Payment terms: Net 60. Due date: 30 November 2026."
- "Terms: 2/10 net 60. Deduct 2% ($200.00) if paid by 11 October 2026; otherwise $10,000.00 is due by 30 November 2026."
- "Payment due 60 days from invoice date per Master Services Agreement dated 1 July 2026. Overdue balances may incur interest as set out in clause 7."
Always show an actual due date as well as the term, so nobody has to count days.
Common mistakes with long payment terms
- Accepting the buyer's default terms without asking. Many will shorten them for small suppliers.
- Not pricing in the delay. Long terms are a cost, so treat them as one.
- Missing PO numbers or portal steps, which reset the clock.
- Offering a discount you cannot afford. Calculate the implied annual rate first.
- Doing months of work before the first invoice. Use deposits and milestones.
Net 60 negotiation checklist
- Terms definition read: calendar days, from invoice date, receipt or end of month.
- Cost of waiting calculated and built into your price.
- Counter-offer prepared: net 30, deposit, milestones or 2/10 discount.
- PO, legal entity, onboarding and submission channel confirmed.
- Due date shown on every invoice, with a reminder schedule set.
Next step
Before you sign your next supplier agreement, run the cost-of-waiting formula on your quote and prepare one counter-offer. Then set the agreed terms and an exact due date on your invoice in the invoice generator, together with the client's PO number.
Frequently asked questions
Does net 60 mean 60 business days?
No. Net 60 normally means 60 calendar days, including weekends and public holidays, counted from the invoice date unless the contract says otherwise. Some large buyers count from receipt of a correct invoice or from the end of the month, so read the exact definition in the supplier agreement.
What does 60 days EOM mean?
EOM means end of month. With 60 days EOM, the 60 days start at the end of the month in which the invoice is dated. An invoice dated 5 March would be due 60 days after 31 March, which is 30 May. That can add almost a month compared with plain net 60.
Can I charge interest if a net 60 invoice is paid late?
Only if your contract allows it or a statute gives you the right. In the UK, the Late Payment of Commercial Debts (Interest) Act 1998 lets businesses claim interest at 8% above the Bank of England base rate on overdue B2B invoices. In the US it depends on your contract and state law.
Is net 90 legal?
Generally yes between businesses, but some places limit it. The EU Late Payment Directive says B2B terms over 60 days must be expressly agreed and not grossly unfair to the supplier. The UK government has proposed capping large companies' terms with small suppliers at 60 days, though that Bill was not law at the time of writing.
Should freelancers ever accept net 90?
Sometimes, when the client is large, reliable and the project is worth the wait. If you do, price the delay in, ask for a deposit or milestone payments, and confirm the invoice approval process so the clock does not restart because of a missing PO number or wrong address.
What happens if day 60 falls on a weekend or public holiday?
It depends on your contract. Many agreements say payment is due on the next business day, while others expect payment on the last business day before. If the contract is silent, the buyer's payment run schedule usually decides in practice. To avoid confusion, write the exact due date on the invoice, and check the supplier agreement for any business day rule.
Is net 60 normal for freelancers?
It is less common than net 15 or net 30 for freelancers, but it is standard with many large companies, agencies and public bodies whose procurement policies apply the same terms to every supplier. Smaller clients rarely need it. If a small client asks for net 60, treat it as a negotiation point and offer a deposit or a shorter term instead.
Do any US laws require clients to pay freelancers faster?
Some do. New York State and New York City have Freelance Isn't Free laws that require written contracts for many freelance jobs of $800 or more and payment by the agreed date, or within 30 days of completing the work if no date is set. Other cities and states have similar rules. Check your local labor department for current requirements.
Can I change the payment terms for an existing client?
Only by agreement for work already contracted. For new work, you can propose new terms, such as moving from net 60 to net 30, with written notice before the next project or renewal. Explain the reason briefly, offer a trade such as a small early payment discount if needed, and update your contract and invoice wording once the client agrees.
Does the net 60 clock start when the client receives the invoice or when it is dated?
Normally from the invoice date, unless the contract says from receipt or from approval. That is why you should send the invoice on the day it is dated and keep proof of delivery, such as a portal confirmation. Never backdate invoices to start the clock earlier, and expect buyers on receipt-based terms to count from when a correct invoice is logged.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
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