Net 45 is an important credit term because it allows customers to pay 15 days later than the more common payment terms of net 30. Net 45 could give well-financed businesses a competitive advantage if they’re willing to take the risk and tie up their cash in accounts receivable longer or offer an early payment discount combined with the net 45 credit terms.
Early Payments Hub
Payment terms are specifications of amounts owed, how, when, and where payments are due on sales transactions between sellers and buyers. Payment terms from a contract or purchase order are included on an invoice to the customer. Although payment terms may be negotiated, often the seller sets payment terms for routine sales transactions.
A net 30 account is 30-day trade credit on invoices for business purchases, also known as a net30 tradeline or vendor tradeline. Net30 accounts offered by vendors extend credit to customers with net 30 terms. Business customers timely pay for purchases without interest charges. They improve their cash flow and build business credit history.
An early payment discount is a form of trade finance and a means for companies to obtain a discount on vendor invoices when paying early. A business pays less than the full amount due while the supplier receives payment earlier than standard payment terms. It benefits both accounts receivable and accounts payable and helps add to your bottom line.