Accounting terms

Dictionary of all accounting terms





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.

Did you know?

InvoiceBerry's online invoicing software can help you create and send your invoices in under 60 seconds?

There are many plans to choose from, even a plan that's absolutely free, forever. Try it out today.

We use cookies to give you a better experience. Check out our privacy policy for more information.
OK