Question
Should I offer Net 30 or Net 60 payment terms?
Trying to decide what's better for my business between Net 30 or Net 60, but I'm worried about cash flow vs. keeping clients happy. Which one makes more sense?
Answer
Net 30 and Net 60 both work, but they serve different goals. Net 30 helps you get paid faster, while Net 60 gives clients more time to pay.
The better option depends on how much you need steady cash flow versus how flexible you want to be with clients.
How do Net 30 and Net 60 affect your cash flow?
Net 30 brings in money sooner, which can help cover expenses and keep your business running smoothly. It also reduces the risk of delayed or missed payments.
Net 60 means waiting longer to get paid. This can put pressure on cash flow, especially for small or growing businesses.
When might Net 60 make sense?
Net 60 can be useful when working with larger clients or in industries where longer terms are common. It may help win business or maintain relationships.
Some businesses offer Net 30 as a default and extend Net 60 only to trusted clients or larger projects.
What to do next...
- Start with Net 30 as a baseline.
- Offer longer terms selectively if needed.
- Review your cash flow before extending terms.
- Include late fee terms to protect against delays.
What to consider in your specific situation
While both options are common, the right choice depends on your business model and clients.
- Your cash flow needs and operating costs.
- Industry norms and client expectations.
- The size and reliability of your clients.
- The value and length of your projects.
- Your risk tolerance for delayed payments.
Since every situation is different, consider more information through Rocket Copilot, a Legal Pro, or a legal document review to move forward with confidence.
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Please note: This page offers general legal information, but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.
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Disclosures
- This page offers general legal information, not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.