What is Net-60?
Net-60 is a payment term meaning full payment is due within 60 days of the invoice date — common in B2B and manufacturing, but lengthy for most freelancers.
Definition
Net-60 is a standard payment term indicating that the full invoice amount is due within 60 calendar days of the invoice date. The payment clock starts on the invoice date, not on the date the client receives or reviews the invoice. At the end of 60 days, the full net amount is due. Net-60 is commonly used in B2B transactions, manufacturing, wholesale distribution, and government contracting — industries where procurement cycles, inspection periods, or approval chains are longer than in typical professional services.
When Net-60 Is Used
Net-60 is most commonly used in: manufacturing and industrial supply chains, where goods may need to be inspected or tested before payment is authorized; wholesale distribution, where large volumes of goods change hands and 60 days is standard for managing inventory cycles; government contracts, where procurement requires multiple approvals and budget clearances; large enterprise clients, where corporate accounts payable departments process payments on a quarterly or bi-monthly cycle. In these contexts, Net-60 is an established norm that both buyers and sellers accept. Offering Net-60 in these industries signals that you understand their business and are flexible enough to accommodate their processes.
Net-60 vs. Other Payment Terms
Net-60 sits at the longer end of the standard payment term spectrum. Net-15 (15 days) is used for trusted clients or smaller invoices where cash flow permits. Net-30 (30 days) is the default for most B2B professional services. Net-60 extends the payment window significantly and is generally better suited for product-based businesses than service-based ones. Net-90 (90 days) is reserved for very long-cycle industries like government or large-scale manufacturing. If you are a freelancer or agency offering professional services, Net-60 is usually too long unless you have negotiated it with a well-established, reliable client — and even then, you should consider milestone payments or a deposit to protect your cash flow.
Managing Cash Flow with Net-60
If you accept Net-60 terms, managing the resulting cash flow gap is essential. Strategies include: requesting a partial deposit (25-50%) upfront before beginning work; breaking large projects into two or three milestone payments tied to 30-day intervals; using a business line of credit to bridge the gap between delivering work and receiving payment; sending payment reminders at day 45 (two weeks before due date) to ensure your invoice is in the next AP run; and tracking your average collection period and setting aside reserves to cover months when large invoices are still outstanding. The key is to never be surprised by a cash shortfall caused by a long payment cycle — plan for it in advance.
Key Takeaways
Net-60 means full payment is due within 60 days of the invoice date. It is standard in B2B, manufacturing, and government contexts, but is generally long for freelance services. Accept Net-60 only with established, reliable clients and protect yourself with deposits or milestone payments. Always send reminders at day 45 to ensure your invoice is processed on time.