What does net 30 mean on an invoice?

Net 30 is a payment term that says the customer has 30 days from the invoice date to pay in full. It is the most common default across North American B2B sales. If an invoice dated April 1 is marked net 30, the money is due on May 1, with anything after that classed as past due.

Net 30 persists because it is a reasonable compromise between the seller wanting to be paid quickly and the buyer wanting time to receive, inspect, approve, and process the invoice through their AP system. Many buyers run weekly or bi-weekly check runs, so net 30 gives them a full cycle or two to route the invoice internally.

From a cash-flow perspective, net 30 is also where a lot of silent drag starts. Customers who routinely stretch net 30 into net 40 or net 45 are essentially using the seller as an interest-free line of credit. Tracking DSO against your stated terms is the easiest way to catch that drift before it becomes habit across the customer base.