What Does Net 30 Mean on Invoices? Definition and Examples

What does net 30 mean?

Net 30, or net-30, is a common payment term found on service invoices that means a client has 30 days to make a payment after: 

• The job is completed
• You send an invoice
• Or, products, materials, or supplies have been delivered

When the 30 days begin is up to you and depends on the kind of services you offer, the industry you’re in, and when you need to get paid to cover your expenses. 

For example, a cleaning business that provides weekly cleaning may send a monthly invoice to a recurring client where the 30 days begin upon receipt of the invoice. Or, a plumber doing a quick repair job may expect to be paid within 30 days of the job being completed. 

It’s also important to note that net 30 includes weekends and holidays unless otherwise indicated in your payment terms. 

For example, if you were to send an invoice to a client on May 15th with a net 30 pay period, payment in full would be due by June 15th.

Who should use net 30 payment periods?

You should use a net 30 payment term if: 

• You want to have more predictable cash flow
• You need a standard billing cycle that’s easy for clients to understand
• You want to give clients a reasonable amount of time to pay their bills
• Your clients have trouble paying you on time because your current billing cycle is too short, confusing, or inconsistent
• You tend to take on large projects with bigger price tags that clients need time to budget for

What are the benefits of a net 30 billing cycle?

While there are many other common billing cycles, like net 15, net 60, and even net 90, net 30 is the most popular choice for small businesses because:

1. It’s standard across many industries. Net 30 terms aren’t just the payment terms of choice for service providers, they’re also standard for utility companies, cell phone providers, mortgage providers, and auto dealerships. This means most of your clients will be familiar with them, so you won’t have to educate them about your billing cycle.
2. It prevents late payments. If you expect clients to make payments immediately after a job is done, you’ll probably wind up with a lot of outstanding invoices. But giving clients 30 days to pay leaves room for them to fit your bill into their monthly budget, preventing overdue payments and late fees and reducing accounts receivable.
3. It saves time. Since net 30 invoices come with reasonable payment deadlines, you’ll spend less time sending out late payment reminder emails and chasing down clients, giving you more time to focus on winning more clients and growing your business.
4. It helps with cash flow. If you’re having cash flow issues, it may be because you don’t have net payment terms laid out in your invoices. Choosing a reasonable billing cycle and including it in your payment terms ensures clients know when and how to pay, keeping cash flow steady. 
5. It makes invoicing easier. Having a standard net 30 billing cycle streamlines invoicing because your payment terms will be the same for each client. If you use invoicing software like Jobber, your preferred payment terms will be added to your invoice template, ensuring they’re consistent, correct, and clear.

Where to include net 30 payment terms

Any payment terms, including net 30, should be included in your quotes, invoices, and contracts. 

In binding or non-binding quotes, it can be added alongside any other terms or disclaimers, like whether a deposit is required or if taxes are calculated separately. The same goes for your contracts. 

On an invoice, there are two places you can indicate net 30 payment terms: 

• In the invoice due date
• At the bottom of the invoice with any payment instructions

Net 30 payment term examples

Because net 30 payment terms can be used in different scenarios, you need to use the right wording to ensure clients understand when payment is due. 

Use these examples to be clear and upfront about your net 30 term to get paid faster. 

1. Net 30 once the job is done

If you’d like your net 30 term to start as soon as you finish a job, you can use this wording on your quotes and invoices: 

The 30-day payment period begins immediately upon completion of the job. 

Don’t forget to clarify what counts as a finished job with the client before you use this payment term. Otherwise, you may not end up on the same page about when the payment deadline is. 

For example, does the client need to sign off on the job before it’s marked as done, or is it just whenever you’ve provided all the services outlined in the quote? Does net 30 begin before they receive an invoice, and if so, how will your client be notified that the job is considered complete?

2. Net 30 after the invoice is sent

Most service businesses start net 30 terms on the day an invoice is sent to a client using wording like this: 

The 30-day payment period begins from the day the invoice is provided to the client. 

It’s essential to make sure your term states net 30 begins from the day the invoice is sent to the client, not when it’s received by them. You wouldn’t want them to wait until the end of the month to open your email and then assume they have an entire month left to make a payment. 

Including both an invoice date and payment due date on your invoices is the best way to prevent this, since having a clear deadline leaves little room for confusion. Plus, your clients will appreciate knowing exactly when you expect to be paid. 

FREE TOOL: Invoice template

3. Net 30 when products, materials, or supplies are received

If you sell materials, products, or supplies to clients, you may have to wait for stock to come in before billing a client. After all, you wouldn’t expect them to pay you before they even have what they ordered. 

In these cases, your net 30 payment term can be worded as follows:

The 30-day payment period begins once all [MATERIALS/SUPPLIES/PRODUCTS] have been received by the customer. 

If the materials or supplies are required to complete a job, you may still need to finish the work before you bill the client. It’s uncommon to send invoices before the end of a job unless they’re ongoing or the client previously agreed to pay in installments.

What if I want to get paid faster?

Although net 30 is the most common billing cycle, waiting 30 days to get paid can feel like a long time. If you want to get paid faster, you can try: 

• Using shorter payment terms. Net 10 and net 15 are common payment terms with shorter pay periods (10 days and fifteen days). However, some clients may struggle to make payments that quickly, especially for jobs with big price tags. 

If you’re working with new customers or you need to order expensive materials for a job, you can also take a cash-on-delivery (COD) approach. This ensures you aren’t left footing the bill for supplies you can’t use or extending credit to a customer you haven’t developed a relationship with yet. 

• Use different payment terms for different clients. Depending on the job and client, you may want to customize the payment periods you offer. For example, you may set recurring payments for biweekly lawn care to be due at the end of each month while requesting payment for fertilizer orders to be paid upfront.

• Streamlining quoting and invoicing. If you provide accurate, itemized quotes before jobs begin, clients won’t be surprised by the total due on their invoices. In turn, they won’t have to adjust their budget to cover unexpected costs. This means they’ll be able to pay you sooner since they anticipated the bill and had time to plan for it. 

Software like Jobber helps you to create, track, and manage quotes and invoices on the job so your bills are consistent, correct, and clear.

• Offering early payment incentives. If you want to stick to a net 30 term, you can encourage early payments by offering a 2/10 net 30 or 1/10 net 30 option.
  • 2/10 net 30 means the client will receive a 2% discount if they pay within 10 days. 
  • 1/10 means the client will receive a 1% discount if they pay within 10 days. 
  • Otherwise, the full invoice is due within 30 days. 

• Making it easier for clients to pay. Even with net 30 terms, the more payment options you offer, the more likely clients are to pay early. For example, by processing credit card payments through your website or accepting e-transfers, clients can pay you at their convenience instead of heading to your office with cash or a check.