Question 1

What does Net 60 mean on an invoice?

Accepted Answer

Net 60 means the full invoice amount is due within 60 calendar days of the invoice date.

Use Net 60 only when required by the client — either contractually mandated by a large enterprise or government agency, or because the relationship would be lost if you insist on shorter terms.

Yes.

Question 2

When should I use Net 60 instead of Net 30?

Accepted Answer

Use Net 60 only when required by the client — either contractually mandated by a large enterprise or government agency, or because the relationship would be lost if you insist on shorter terms. For most freelance and small business work, Net 30 or shorter is more appropriate. Net 60 carries significant cash flow risk: on $8,000/month revenue, you carry approximately $16,000 in outstanding receivables at any given time.

Question 3

Can I offer an early payment discount with Net 60 terms?

Accepted Answer

Yes. A common structure is '2/15 Net 60' — the client receives a 2% discount if they pay within 15 days; otherwise, the full amount is due in 60 days. On a $10,000 invoice, this offers the client a $200 saving in exchange for paying 45 days early. For clients who actively manage their cash and take advantage of early-pay discounts, this can accelerate your collections significantly.

Question 4

How do I protect my cash flow when clients require Net 60?

Accepted Answer

Five strategies: (1) Require a 25–50% upfront deposit before work begins; (2) Use milestone billing so only the final invoice is on Net 60 — earlier milestones use Net 15 or Net 30; (3) Build 2–3 months of operating expenses in cash reserves; (4) Explore invoice factoring (selling unpaid invoices for immediate cash at a discount of 1–5%); (5) Offer a 2% early-pay discount to incentivize faster payment within the 60-day window.

Question 5

How do I track Net 60 invoices and avoid missing follow-up?

Accepted Answer

Set calendar reminders or use invoicing software that automatically tracks due dates. For Net 60 invoices, a good schedule: send a proactive reminder at Day 45 (15 days before due), another at Day 55 (5 days before due), and an overdue notice at Day 61 if unpaid. Don't wait until after the due date — proactive reminders significantly improve on-time payment even on long-term windows.

What is Net 60?

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Frequently Asked Questions

What does Net 60 mean on an invoice?

When should I use Net 60 instead of Net 30?

Can I offer an early payment discount with Net 60 terms?

How do I protect my cash flow when clients require Net 60?

How do I track Net 60 invoices and avoid missing follow-up?