What is 2/10 Net 30?

2/10 Net 30 means the customer receiving a 2% discount if they cover their accounts receivable to vendor within 10 days, otherwise pay the full amount in 30 days.

This is a very common practice in business to business (B2B) sales. Dealing in larger quantities or large ticket items, the customer typically has a month to reimburse their invoices to vendors.

Offering a discount - in this case being 2% - it entices customers into paying their invoices faster. A vendor may want to have access to quick cash promptly rather than receive the full amount at a later date; the discount can expedite the payment process.

Example

Let's say that a customer bought $100,000 worth of goods from a vendor. If they were to pay the invoice in full within 10 days, they will only have to pay $98,000. If they cannot meet this 10 day deadline, the discount does not apply, and the customer will be subject to paying the 100k at the end of the 30 days.