As a freelancer, you will often order some services, that will help your business. Sometimes you will overdue with your payment. Have you ever look in your payment bill and see the phrase “net60”?
What is Net60?
Net60 represents a term in contracts or invoices that indicates on bills that customers have 60 days remaining to pay their overdue bills. In this way, the seller wants to explain when and how customers should pay the invoice.
Understanding 60 Days Payment Terms
Generally, what happens in that sense is that when you get the bills or send out the payments or bills, you get the notice or send out a bill, there will be some notice of when payment is due and when you have to pay that.
So to let the receiver of the bill get this information of when to pay his or her bills, this is the one way to provide the information by writing like “net 30” or “net 60,” which means the net balance on the bill is due in 30 days, 60 days, or whatever number is indicated.
In some cases, you may see some of the indications or notations like “1/10 net 30” or “2/10 net 60, this kind of notations means that you will get a percentage discount if you pay your bill sooner than the overdue date.
Reading this is also very simple; the number you see before the slash in the notation indicates the amount of the discount, such as 1 percent, in the first example. The number written in the second after the slash indicates the days the customer has to pay their bills and still get the discount.
Even if the receipts or bills do not indicate the “net” word but instead show the notations like “due on receipt,” it also impacts the bills, which means that the customer is bound to pay their bills immediately after receiving them. If the deadline for paying a bill has come, and you missed it, it may be labeled “past due.”
Net60 and Choosing Billing Terms
And if you own small cooperation and business, you probably can not take the things into one place and directly go for the due receipts.
It’s like when you work as an owner of the business, you need to get compensation for the services or the products that you are offering to your customers, so in that case, what you need to do is to get the money from your customers on the very next moment when you let them buy your product. And if you go for the option of net60, that would be a long term factor, so most business runners go for the option of due on receipt.
Still, there are a lot of reasons that you can use for more generous billings. Many customers find you more open and transparent to work with if you actually give them some room to breathe and respect their say in the process where they can evaluate your work and get the funds together to pay you as compared to if you ask them money directly and immediately.
Giving 30 or 60 days’ notice can also give you a clear time after which you can begin to request payment more aggressively, knowing it’s been spelled out how long your client has to pay. The cash-flow impact of payment terms isn’t always as clear cut as it seems.
Due Dates and the Law for the bills
In some cases, customers are bound to get their bills to be paid within a certain amount of time. This may be said true for government or government-related contracts or contracts in certain jurisdictions. For example, it is important to pay off your client in New York City as soon as possible after they do the services.
It is fair enough to know about the law in the place where you are doing your business to help you in billing practices. Every state has different laws for different billing sections.