Net 60 is an invoice payment deadline of 60 days from the date on the bill

When a business sends you an invoice marked "Net 60," it means you have 60 calendar days from the invoice date to pay the full amount. The clock starts on the day the invoice is issued, not when you receive it or when goods arrive. If an invoice is dated January 1, your payment is due by March 1 (or February 29 in a leap year). No partial payments, no installments—the full balance is expected by that date.

Net 60 is a trade credit term, meaning the seller is lending you the money for two months. You get the goods or service now and pay later. This is common between businesses (B2B), less common for individual consumers, and almost never used for retail purchases. The seller does not charge interest during those 60 days unless the invoice specifies otherwise.

The term appears on the invoice itself, usually in the payment terms section near the total amount due. You might see it written as "Net 60," "N60," or "Due in 60 days." Some invoices also list an early-payment discount—for example, "2/10 Net 60" means you can deduct 2% if you pay within 10 days, otherwise the full amount is due in 60 days.

Key Takeaways

  • Net 60 means the full invoice amount is due 60 calendar days from the invoice date, with no interest charged during that period unless stated otherwise.
  • The 60-day clock starts on the invoice date, not the delivery date or the date you receive the bill.
  • Early-payment discounts (such as 2/10 Net 60) reward you for paying before the full 60 days are up, but are optional.
  • Paying after the due date may trigger late fees, damage your credit relationship with the vendor, or result in collection action.
  • Net 60 is primarily a business-to-business arrangement and is rarely offered to individual consumers for personal purchases.

How the 60-day clock works in practice

The invoice date is the only date that matters for Net 60 terms. If a vendor ships goods on January 5 but dates the invoice January 1, your 60 days start on January 1. If you receive the goods on January 10, that does not extend the deadline. The invoice date is printed on the bill itself and is the legal starting point.

You should mark the due date on your calendar or in your accounting system immediately upon receiving the invoice. Sixty days from January 1 is March 1 (31 days in January + 28 in February + 1 = 60). If you are unsure, add 60 days using a date calculator or your accounting software, which will account for leap years and month lengths automatically.

Payment must be received by the vendor by the due date, not mailed or initiated on that date. If you pay by check, mail it early enough that it arrives before day 60. If you pay by bank transfer or credit card, process it at least one business day before the deadline to account for processing time. Some vendors specify where and how payment should be sent; follow those instructions exactly.

Early-payment discounts and why they matter

Many Net 60 invoices include an early-payment incentive, written as "2/10 Net 60" or "1/15 Net 60." The first number is the discount percentage; the second is the number of days you have to earn it. In the example "2/10 Net 60," you can deduct 2% from the invoice total if you pay within 10 days. After day 10, the discount disappears, but you still have until day 60 to pay the full amount without penalty.

Whether to take an early-payment discount depends on your cash flow and the cost of that money. A 2% discount for paying 50 days early (from day 60 to day 10) is worth about 14.6% annualized—a strong return if you have the cash available. However, if taking the discount means borrowing money at a higher rate or depleting your operating cash, it may not be worth it. Calculate the annualized rate of return before deciding.

Early-payment discounts are optional. Declining the discount and paying on day 60 is always allowed unless the invoice explicitly states otherwise (which is rare). The vendor cannot penalize you for not taking the discount.

What happens if you miss the Net 60 deadline

Paying after day 60 is considered late. The invoice may specify a late fee—often a percentage of the balance or a flat amount per day overdue. If no late fee is stated, the vendor can still pursue collection, damage your credit standing with them, or refuse future trade credit. Some vendors report late payments to credit bureaus, which can affect your business credit score.

If you know you will miss the deadline, contact the vendor before day 60. Many will grant a short extension if you communicate in advance and explain the delay. Ignoring the deadline and paying weeks or months late without notice is far more damaging to the relationship than asking for a few extra days upfront.

Repeated late payments can result in the vendor switching you to cash-on-delivery (COD) or requiring payment upfront before shipping. You lose the benefit of trade credit, which increases your working capital needs. In severe cases, the vendor may refer the account to a collection agency or pursue legal action, though this is uncommon for small amounts.

Net 60 versus other payment terms

Net 60 is one of several standard trade credit terms. Net 30 is shorter (30 days to pay) and more common for smaller transactions or newer vendors. Net 90 is longer (90 days) and is often used for large orders or established customers. Some vendors offer Net 15 (15 days) for faster payment, or 2/10 Net 30 for a shorter window with a steeper early-payment incentive.

Cash on delivery (COD) means you pay when the goods arrive, with no credit period. Prepayment means you pay before the vendor ships anything. These terms offer no float—no time to use the money before paying. Net 60 gives you two months of free working capital, which is valuable if you can use that time to sell the goods or complete the work before paying your vendor.

End-of-month (EOM) terms are sometimes used instead of a fixed number of days. "Net 60 EOM" means 60 days from the end of the month in which the invoice was issued. If the invoice is dated January 15, the 60 days start February 1, making the due date around April 1. This is less common than a straight Net 60 but appears in some industries.

How to track and manage Net 60 invoices

Use your accounting software or a simple spreadsheet to log every invoice with a Net 60 term. Record the vendor name, invoice number, invoice date, amount, and calculated due date. Set a reminder for 5 to 10 days before the due date so you have time to process payment without rushing. Many accounting systems (QuickBooks, FreshBooks, Xero) can flag upcoming due dates automatically.

If you receive multiple invoices from the same vendor, keep them organized by due date, not by vendor. This prevents you from accidentally paying one invoice on time while missing another. Some vendors send statements that summarize all open invoices; use these as a backup check against your own records.

For vendors you work with regularly, ask whether they offer early-payment discounts and whether they have a preferred payment method (ACH transfer, check, credit card). Paying by their preferred method often speeds up posting and reduces the risk of a payment being misapplied or delayed in their system.

Frequently Asked Questions

Does Net 60 start from when I receive the goods or from the invoice date?

It starts from the invoice date, which is printed on the bill itself. The invoice date and the delivery date are usually different. If you receive goods on January 10 but the invoice is dated January 1, your 60 days started on January 1, not January 10. Check the invoice date immediately when you receive a bill.

Can I pay part of a Net 60 invoice early and the rest later?

That depends on the vendor's policy, which is not stated on most invoices. Some vendors allow partial payments; others require the full amount by the due date. If you need to pay in installments, contact the vendor before the due date and ask whether they will accept a payment plan. Do not assume partial payments are allowed.

What if the invoice says Net 60 but also lists a late fee?

The late fee applies only if you pay after day 60. The late fee amount and how it is calculated should be stated on the invoice. If it is not clear, contact the vendor to confirm. Late fees are separate from the invoice total and are added to what you owe if payment is late.

Is Net 60 the same as a 60-day payment plan?

No. Net 60 is a single payment due on day 60. A payment plan breaks the total into multiple installments over time. Net 60 requires the full balance at once; a payment plan spreads it across several dates. If you need to pay in installments, you must negotiate a payment plan separately—Net 60 does not provide that by default.

Can a vendor change Net 60 terms after sending the invoice?

The terms on the invoice are the agreement. A vendor cannot unilaterally change the due date after the invoice is issued without your consent. If a vendor contacts you claiming the terms have changed, ask them to send a revised invoice or a written amendment. Do not assume a verbal claim overrides what is printed on the bill.