What Are Net 60 Payment Terms and How Do They Work

Net 60 payment terms give buyers 60 calendar days from the invoice date to pay in full—a form of trade credit that’s standard in B2B transactions between wholesalers, distributors, and their retail customers.

Offering net 60 can win you larger orders and stronger buyer relationships, but it also ties up cash and introduces collection risk. This guide covers how net 60 works, common variations like 2/10 net 60 and net 60 EOM, how to qualify customers for trade credit, and how to operationalize net terms in B2B ecommerce.

What Are Net 60 Payment Terms

Net 60 is a payment term that gives buyers 60 calendar days from the invoice date to pay in full. It’s a form of trade credit—essentially a short-term, interest-free loan from seller to buyer—and it’s common in B2B transactions where wholesalers, distributors, and manufacturers sell to retailers or other businesses.

The “net” part means the full amount is due. The “60” is the number of days. So when you see “Net 60” on an invoice, the buyer has two months from the invoice date to send payment.

Why does this exist? B2B buyers often place large orders and want time to sell inventory or process internal approvals before paying. Sellers, meanwhile, use net terms to win bigger orders and build loyalty with wholesale accounts who expect payment flexibility.

How Net 60 Payment Terms Work

The 60-day countdown starts on the invoice date—not when the buyer receives the goods or when the order ships. This distinction matters because it determines when payment is actually due.

Here’s the typical flow: the seller ships the order and sends an invoice with “Net 60” printed on it. From that invoice date, the buyer has 60 calendar days to pay the full amount. On day 61, the payment is late.

Clear documentation prevents disputes. The payment terms, invoice date, and due date all belong on the invoice itself. If a buyer can’t quickly identify when the 60-day window started, late payments and awkward conversations follow.

How to Write Net 60 on an Invoice

Placement matters. Put the payment terms near the total or in a dedicated payment section where buyers will see them.

Common phrasing includes:

• “Net 60”
• “Payment due within 60 days”
• “Net 60 from invoice date”

The invoice date is just as important as the terms themselves. Make it prominent so there’s no ambiguity about when the countdown began.

Net 60 vs Net 30 vs Net 90 Payment Terms

The number in net terms simply indicates how many days the buyer has to pay. Net 30 gives 30 days, net 60 gives 60, and net 90 gives 90.

Term	Payment Window	Typical Use Case
Net 30	30 days	Standard B2B transactions
Net 60	60 days	Larger wholesale orders
Net 90	90 days	Enterprise or high-value contracts

Net 30 is the default in most industries. Net 60 often comes into play for larger orders or established relationships. Net 90 is typically reserved for enterprise deals or industries with long sales cycles.

The longer the terms, the more cash flow risk the seller takes on. The decision usually depends on the buyer’s creditworthiness and the value of the relationship.

Common Net 60 Payment Term Variations

Not all net 60 terms work the same way. Several variations exist to accommodate different business needs.

Standard Net 60

Payment is due 60 days from the invoice date with no discount offered. This is the most straightforward version and what most people mean when they say “net 60.”

2/10 Net 60

The buyer receives a 2% discount if they pay within 10 days. Otherwise, the full amount is due in 60 days. The “2/10” notation means 2% off for payment within 10 days.

1/10 Net 60

Similar structure, smaller discount. The buyer gets 1% off for paying within 10 days.

Net 60 EOM

EOM stands for “End of Month.” The 60-day period begins at the end of the month the invoice was issued, not on the invoice date itself. If you invoice on March 15th, the countdown starts March 31st.

Net 60 ROG

ROG stands for “Receipt of Goods.” The 60-day window starts when the buyer receives the shipment, not when the invoice is dated. This variation is common when shipping times are long or unpredictable.

Benefits of Offering Net 60 Payment Terms

Larger Average Order Value

Buyers often order more when they have time to pay. A retailer stocking up for a busy season might place a bigger order knowing they’ll have revenue coming in before the bill is due.

Stronger Buyer Loyalty

Flexible payment terms build trust and strengthen your B2B ecommerce strategy. Buyers remember which suppliers made their operations easier, and that goodwill translates into repeat orders.

Competitive Advantage in Wholesale

Many B2B buyers expect net terms. If competitors offer them and you don’t, you’re at a disadvantage before the conversation starts.

Easier B2B Customer Acquisition

New wholesale accounts are often hesitant to pay upfront to an unfamiliar supplier. Net terms reduce that friction and lower the barrier to a first order.

Drawbacks and Risks of Net 60 Payment Terms

Cash Flow Strain

You ship goods today but might not see payment for two months. That gap between expense and revenue can strain working capital, especially for smaller operations with tight margins.

Bad Debt Exposure

Some buyers never pay. Without credit checks or limits in place, you’re extending unsecured credit to customers you may not know well.

Administrative Overhead

Tracking open invoices, sending reminders, and managing collections all take time. The longer the terms, the more touchpoints required to get paid.

Late Payment Risk

Even with agreed terms, buyers sometimes pay beyond 60 days—half of U.S. B2B invoices are currently overdue. Late payments extend your cash flow gap further and complicate forecasting.

How Net 60 Affects Cash Flow and Working Capital

Working capital is the cash available for day-to-day operations. When you offer net 60 terms, your cash is tied up in accounts receivable until the buyer pays.

This isn’t inherently bad—it’s a tradeoff. You’re trading immediate cash for larger orders, stronger relationships, and competitive positioning. The key is planning for it.

Sellers offering net 60 typically maintain cash reserves, use invoice factoring—a $3.46 trillion global market—or secure a line of credit to bridge the gap. Without that buffer, a few large orders on net 60 can create real liquidity problems.

How to Qualify Customers for Net 60 Trade Credit

Extending credit to every buyer who asks is risky. A qualification process helps you offer net terms to the right customers while protecting your business.

Step 1. Collect Business and Financial Information

Request the business name, tax ID, bank references, and trade references from the buyer. This baseline information helps verify legitimacy.

Step 2. Run a Trade Credit Check

Use credit reports or call trade references to assess the buyer’s payment history. A buyer who pays other suppliers late will likely pay you late too.

Step 3. Set a Credit Limit per Customer

Assign a maximum outstanding balance the buyer can carry at any time. This caps your exposure if something goes wrong.

Step 4. Define Internal Approval Rules

Establish who approves credit applications and under what conditions. Clear rules prevent ad-hoc decisions that create inconsistency.

Step 5. Document Terms in a Credit Agreement

Put net 60 terms, credit limits, and late payment policies in writing. Have the buyer sign before extending credit.

Alternatives to Net 60 Payment Terms

Net 60 isn’t the only option. Depending on your risk tolerance and buyer relationships, other structures might work better.

• Net 30 or Net 45: Shorter payment windows reduce cash flow gaps while still offering credit
• Early payment discounts: Incentivize faster payment with discounts like 2/10 net 30
• Partial deposits upfront: Require a percentage before fulfillment, with the balance on net terms
• Request for quote workflows: For large orders, use a request for quote process to negotiate payment terms per deal
• Trade credit insurance: Protect against non-payment by insuring receivables

Best Practices for Managing Net 60 Payment Terms

Automate Invoice Generation and Reminders

Use software to send invoices immediately and trigger payment reminders before and at the due date. Manual follow-up doesn’t scale well as your wholesale business grows.

Enforce Credit Limits at Checkout

Block orders that would exceed a buyer’s approved credit limit. This prevents overexposure before it happens rather than after.

Sync Receivables With Your ERP

Keep invoice and payment data aligned through proper B2B ecommerce integration between your ecommerce platform and accounting or ERP system. Disconnected data leads to errors and missed payments.

Segment Buyers by Customer Group

Assign different net terms to different customer groups based on creditworthiness or relationship length. Not every customer deserves the same terms.

Monitor Aging and DSO Continuously

DSO (Days Sales Outstanding) measures how long it takes on average to collect payment—45–75 days in manufacturing, for example. Track DSO and aging reports to catch late payments early. The sooner you spot a problem, the easier it is to address.

How to Offer Net 60 Payment Terms in B2B Ecommerce

For merchants selling online, enabling net terms at checkout requires the right setup.

Step 1. Gate Net Terms Behind Verified B2B Accounts

Only approved wholesale buyers see or select net 60 at checkout. Retail customers and unverified visitors don’t get access to net terms.

Step 2. Configure Customer Groups and Credit Rules

Set up buyer segments with specific terms and credit limits in your B2B platform. This automation replaces manual approvals for each order.

Step 3. Enable a Net Terms Checkout Option

Add net 60 as a B2B payment method that qualified buyers can select during checkout. The experience feels seamless to the buyer while you maintain control.

Step 4. Connect Orders to Your ERP or Accounting System

Sync net terms orders to your back-office systems through a Shopify B2B integration for invoicing and receivables tracking. Manual data entry creates errors and delays.

Step 5. Track Invoices and Collections in One Place

Centralize visibility into outstanding invoices, payment status, and aging. Scattered data across systems makes collections harder than it has to be.

Run Net 60 Payment Terms on Shopify With B2Bridge

If you’re running B2B on Shopify, B2Bridge makes net payment terms operational without custom development.

• Net payment terms: Offer net 15, 30, or 60 to verified B2B buyers at checkout
• Credit limits: Set per-customer credit caps enforced automatically
• Customer groups: Assign different terms to different buyer segments
• ERP integration: Sync orders and invoices with NetSuite, Zoho, Odoo, or custom ERPs

Contact us to get guidance on setting up net terms for your Shopify store.

Frequently Asked Questions About Net 60 Payment Terms

Does net 60 include weekends and holidays?

Yes, net 60 counts calendar days including weekends and holidays unless otherwise specified in the agreement.

Is net 60 calculated from the invoice date or the delivery date?

Standard net 60 starts from the invoice date. Variations like Net 60 ROG start from when goods are received.

What happens if a customer pays late on net 60 terms?

Late payment may trigger late fees or interest if specified in the agreement. It can also affect the buyer’s credit standing with the seller and their eligibility for future net terms.

Can small businesses afford to offer net 60 terms?

Small businesses can offer net 60 if they have sufficient working capital or use invoice factoring to bridge the cash flow gap. The key is planning for the delay between shipping and payment.

How is net 60 different from net 60 EOM?

Net 60 starts from the invoice date. Net 60 EOM starts the 60-day countdown at the end of the month the invoice was issued, which can add extra days depending on when in the month you invoice.