Net Payment Terms

The number of days after invoice receipt before payment is contractually due. Net 30 means payment is due 30 days after the invoice date. 

For cash constrained mid-market companies, extending payment terms from Net 30 to Net 60 or Net 90 provides an interest-free operational financing mechanism equivalent to a short-term line of credit.

The negotiation leverage for extended terms is strongest at contract initiation and at renewal. It is never present at mid-contract.