Net 60 means the buyer has 60 days from the invoice date to pay you
Net 60 is a payment important date written on an invoice. It tells the buyer they have 60 calendar days from the date on the invoice to send you the money. If you invoice on January 1st, the payment is due by March 1st. Nothing happens automatically on day 61—but that's when the invoice becomes overdue, and you can start collection steps.
Net 60 is common in B2B transactions, especially between businesses that have an existing relationship or where the buyer is larger and has negotiating power. It's less common for one-time sales or small transactions. The longer the payment window, the more cash flow pressure it puts on you, because you're waiting two months to see the money while your own bills may be due sooner.
Key Takeaways
- Net 60 gives the buyer 60 calendar days from the invoice date to pay, not 60 business days.
- The invoice date is what matters for the countdown—not the date the buyer receives it or when work was completed.
- Payment is overdue on day 61, and you can pursue collection or late fees if your contract allows them.
- Shorter terms like Net 30 or Net 15 reduce your cash flow risk, while longer terms like Net 90 make it harder to cover your own expenses.
- You should state Net 60 clearly on every invoice and include it in your written contract or terms of service.
How the 60-day clock works
The clock starts on the invoice date, not the date you send it, deliver the work, or the buyer receives it. If your invoice says "Invoice Date: January 15," then day 1 is January 15, and day 60 is March 15. The buyer owes you the money by end of business on March 15.
Weekends and holidays do not stop the clock. Net 60 means 60 calendar days, so if day 60 falls on a Saturday, the payment is still due that day (though in practice most businesses expect payment by the next business day). Some contracts specify "Net 60 business days" instead, which excludes weekends and holidays, but that's less common and should be stated explicitly.
If you don't write a payment important date on the invoice, the buyer may assume they have 30 days, or they may pay whenever they want. Always write the term clearly: "Payment Terms: Net 60" or "Due Date: [specific date]" so there's no confusion later.
Why businesses use Net 60 instead of shorter terms
Larger buyers often demand Net 60 or longer because it gives them time to receive the goods, verify the invoice matches the order, process it through their accounting system, and schedule payment. If you're selling to a corporation or government agency, Net 60 is standard—they may not agree to Net 30 or Net 15 no matter what you ask.
Net 60 also signals that you're an established business willing to extend credit. Startups and small vendors often use Net 30 or Net 15 to manage cash flow, while larger vendors with more financial cushion can afford to wait longer. If a buyer insists on Net 60 and you can't afford to wait that long, you can negotiate a shorter term, ask for a deposit upfront, or decline the deal.
Some businesses use Net 60 to stay competitive. If your competitors offer it and you don't, you may lose deals. But offering longer terms costs you real money in delayed cash flow, so only do it if the deal is large enough or the customer reliable enough to justify the wait.
What happens if the buyer doesn't pay by day 60
On day 61, the invoice is overdue. You can send a reminder email or letter. Many buyers pay late by accident—their accounting department missed it, the invoice got lost, or they're waiting for their own customer to pay them first. A straightforward reminder often works.
If you have a written contract or terms of service that say Net 60, you can charge a late fee once the invoice is overdue. The late fee amount varies by state and by contract—it might be 1.5% of the invoice per month, or a flat fee. Check your state's laws on late fees before you add one, because some states cap how much you can charge. Always include the late fee policy in your contract before you invoice, not after.
If the buyer still doesn't pay after 30 or 60 days overdue, you can send a formal demand letter, hire a collection agency, or sue in small claims court (if the amount is small enough). These steps cost time and money, so they only make sense if the invoice is large. For small invoices, it's often cheaper to write off the loss than to pursue it.
Net 60 versus other common payment terms
| Term | Payment important date | When to Use It | Cash Flow Impact |
|---|---|---|---|
| Net 15 | 15 days from invoice date | Small transactions, one-time sales, or when you need cash quickly | Low risk; you get paid fast |
| Net 30 | 30 days from invoice date | Standard for most B2B; balances buyer convenience and seller cash flow | Moderate; most common term |
| Net 60 | 60 days from invoice date | Large buyers, government contracts, or when you have strong cash reserves | High; you wait two months for payment |
| Net 90 | 90 days from invoice date | Very large contracts or when the buyer has significant negotiating power | Very high; you wait three months |
| Due on Receipt | when ready or within a few days | High-risk buyers, new customers, or when you can't afford to extend credit | Lowest risk; payment expected right away |
How to protect yourself when offering Net 60
Put the term in writing before you do the work. Include it in your contract, proposal, or terms of service so the buyer knows what they're agreeing to. If you add it only to the invoice after the work is done, the buyer may dispute it or claim they never saw it.
Track your invoices carefully. Use invoicing software or a spreadsheet to record the invoice date, amount, buyer name, and due date. When day 60 approaches, send a reminder email a few days before the due date. After day 60, send a formal overdue notice. This creates a paper trail if you need to pursue collection later.
Consider requiring a deposit for large projects. If the total job is worth $5,000 or more, ask for 25% or 50% upfront and the rest on Net 60. This reduces your risk if the buyer doesn't pay. For very large contracts, you might invoice in stages—25% when you start, 25% at the midpoint, and 50% on completion—rather than waiting until the end.
Check the buyer's credit history if you can. If you're selling to a new business or someone with a history of late payment, use Net 30 or Net 15 instead, or require payment upfront. You can also use a credit reporting service or ask for references from other vendors they've worked with.
Negotiating Net 60 if it doesn't work for you
If a buyer demands Net 60 but you can't afford to wait that long, propose a compromise. Offer Net 45 instead, or Net 60 with a 2% discount if they pay within 10 days. This gives them an incentive to pay early and improves your cash flow.
You can also ask for a deposit or partial upfront payment. For example: "I can offer Net 60 on the balance if you pay 30% upfront." This reduces the amount you're financing and shows the buyer is serious about the deal.
If the buyer won't budge and you genuinely can't afford Net 60, it's okay to decline the deal. A customer who demands terms you can't sustain is a customer who will strain your business. It's better to say no than to take on a deal that puts you in financial trouble.
Frequently Asked Questions
Does Net 60 mean 60 business days or 60 calendar days?
Net 60 means 60 calendar days unless your invoice or contract specifically says "Net 60 business days." Calendar days include weekends and holidays. If you want to exclude weekends and holidays, you must state that clearly on the invoice.
Can I charge interest or a late fee after day 60?
Yes, if your contract or terms of service say you can. The late fee amount varies by state—some states cap it at 1.5% per month, others allow more. Always include the late fee policy in your written agreement before you invoice, not after the fact. Check your state's laws to make sure your fee is legal.
What if the buyer says they didn't receive the invoice?
Send it again, this time with a read receipt or delivery confirmation if possible. Keep a record of every time you sent it. If you're invoicing by email, use a system that shows when the email was opened. If the buyer claims they never got it, you have proof they did. This is why sending invoices through a documented method matters.
Can I change the payment terms after I've already invoiced?
Technically you can ask, but the buyer is not obligated to agree. If the invoice already says Net 60, the buyer can pay on day 60 and be within their rights. To avoid this problem, agree on payment terms in writing before you start the work, not after.
Is Net 60 common for freelancers and small businesses?
Less common than Net 30. Freelancers and small businesses usually use Net 15 or Net 30 because they need cash faster. Net 60 is more common when you're selling to large corporations, government agencies, or when you have enough cash reserves to wait two months. If you're just starting out, stick with Net 30 or shorter.