Net 90 Calculator | Invoice Payment Terms
Calculate payment due dates, early payment discounts, and late fees for Net 90 invoice terms. Streamline your accounts receivable and optimize cash flow.
Understanding Net 90 Payment Terms
Net 90 is an extended payment term providing 90 days for payment from the invoice date. This lengthy term is typically used for large enterprise accounts, government contracts, and industries with exceptionally long payment cycles.
How It Works
When you issue an invoice with Net 90 terms, the buyer has 90 calendar days from the invoice date to make payment. For example, an invoice dated January 1st with Net 90 terms would be due on Mar 31, 2024.
Common Variations
- Net 90 EOM: Payment due 90 days after end of month
- 2/10 Net 90: 2% discount if paid within 10 days
- Net 90 + COD: Combined terms for partial payment
Payment Term Comparison
| Term | Payment Window | Best For | Risk Level |
|---|---|---|---|
| Net 10 | 10 days | Fast-moving goods, trusted clients | Low |
| Net 30 | 30 days | Standard B2B transactions | Medium |
| Net 45 | 45 days | Large orders, established relationships | Medium |
| Net 60 | 60 days | Enterprise clients, large contracts | Medium-High |
| Net 90 | 90 days | Government, major corporations | High |
Best Practices for Net 90 Terms
Clear Documentation
Always state payment terms prominently on invoices, quotes, and contracts.
Credit Assessment
Evaluate new customers before extending Net payment terms to minimize risk.
Early Payment Incentives
Offer small discounts (1-3%) for payments within 10 days to improve cash flow.
Consistent Follow-up
Send payment reminders before and after the due date systematically.
Late Payment Policy
Establish and communicate clear consequences for late payments upfront.
Automated Invoicing
Use invoicing software to track due dates and automate payment reminders.
Advantages & Disadvantages of Net 90
Advantages
- Essential for government and large enterprise contracts
- Can be a competitive differentiator
- Required in certain regulated industries
- May enable access to otherwise inaccessible markets
- Can support premium pricing strategies
Disadvantages
- Severe cash flow impact requiring significant reserves
- High risk of payment issues over 3-month period
- Almost always requires financing or factoring
- Significant administrative burden for tracking
- May require credit insurance for protection
Frequently Asked Questions
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