Net 60 gives clients two full months to pay, which is generous payment terms typically used for large corporate clients, government contracts, or situations where extended payment periods are standard practice. While this provides clients with maximum flexibility, it significantly impacts cash flow for service providers.
Most small businesses and freelancers avoid Net 60 unless working with large corporations that require it as standard policy. In these cases, the extended terms are often offset by higher project values or the stability of working with established companies that reliably pay within their extended timeframe.
Example
A consulting contract with a Fortune 500 company specifies Net 60 terms, meaning invoices sent on January 1st aren't due until March 2nd (60 calendar days later).
Why It Matters for Freelancers
Net 60 can strain cash flow severely for small businesses. Only consider these terms for high-value clients or when you can afford to wait two months for payment.
Related Terms
Net 30
Payment terms that require the client to pay the invoice within 30 days of the invoice date.
Net 15
Payment terms requiring the client to pay the invoice within 15 days of the invoice date.
Cash Flow
The movement of money in and out of your business over time, measuring when you receive payments versus when you pay expenses.
Net 60 FAQs
When should I accept Net 60 terms?
Only for large, established clients who pay reliably and when the project value justifies waiting 60 days for payment.
How can I manage cash flow with Net 60 clients?
Require deposits, stagger projects, or factor the extended payment into your pricing to cover financing costs.
Can I charge more for Net 60 terms?
Yes, many businesses add 2-5% to project costs for extended payment terms to offset the financing impact.
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