Net 30 Terms: What They Mean for a Small Food Maker

Net 30 terms mean the customer pays the full invoice within 30 days of the invoice date. It's the terms shops, cafés and distributors often ask a wholesale supplier for, and for a small food maker it means one thing above all: you've paid for the ingredients, the jars and the labor weeks before the money comes back. An invoice dated October 12 on net 30 is due November 11. Offer 2/10 net 30 and the customer can take 2% off by paying within 10 days, which gets you paid sooner but costs more than it sounds. In the example below, a taro chip maker that pays its farm on delivery waits 41 days between paying for taro and being paid for chips, and about $6,150 is tied up in that gap at any time; net 15 from the farm cuts it to $3,900. Below is how net 30 works, the due date, early payment discounts, the cash gap, and when to offer terms.

The short version

• Net 30: the full amount is due 30 days after the invoice date.
• Due date = invoice date + 30 days; write the date on the invoice, not only "net 30".
• 2/10 net 30: 2% off if paid within 10 days, otherwise the full amount in 30.
• Terms to customers open a cash gap: you pay for stock long before you're paid.
• The gap is days in stock + days to be paid − days you take to pay suppliers.
• Ask for supplier terms too; they close the gap from the other side.
• TaroStack keeps each customer's terms, orders and margins, and what stock is tying up cash. More below.

Net 30 and its relatives

The 30 days are counted from the invoice date, so invoice the day you deliver. If your terms count from something else, such as delivery, say so on the invoice.

Working out the due date

Invoice date        October 12, 2026
Terms               Net 30
Due date            October 12 + 30 days = November 11, 2026

Write "Terms: net 30. Due November 11, 2026" on the invoice. A date leaves less room for argument than a number of days, and a customer's accounts team pays by date.

What 2/10 net 30 costs you

A 2% discount sounds small. But it's 2% for being paid 20 days early, and over a year that's an expensive way to borrow:

Discount            2% of a $1,000 invoice = $20
Paid early by       30 − 10 = 20 days
Cost, as a yearly rate   2 ÷ 98 × 365 ÷ 20 = about 37%

That doesn't mean never offer it. If cash is short and the alternative is a card advance or a late supplier payment, being paid in 10 days can be worth 2%. Compare it first with the other ways of closing the gap, in how inventory financing works.

The cash gap net 30 opens

Windward Roots, the made-up taro business I use in these examples, sells taro chips wholesale. One batch, start to finish:

From paying for taro to being paid for chips: 41 days, 11 in stock and 30 waiting to be paid. If wholesale chips cost about $150 a day to make, $4,500 a month, that gap holds about 41 × $150 = $6,150 of the business's cash at any time. If the farm agreed to net 15, the gap would shrink to 26 days and about $3,900.

The last row is the one inside your own walls: product that sits in stock is cash that sits too. How much stock is enough is in how much inventory to keep on hand, and what a distributor's terms add to the gap is in distributor margin.

Should a new business offer net 30?

Stores often expect terms, and refusing them can lose the account. But terms are credit, so treat them that way:

1. Ask for the first order prepaid or on delivery, and offer net 30 once they've paid on time.
2. Ask for a credit application: the business's legal name, address, who pays invoices, and a trade reference or two.
3. Set a limit: how much can be owed at once before the next order waits.
4. Write the terms down on the order form and the invoice; what else to write there is in wholesale order form template.
5. Follow up the day after the due date, politely, and keep a list of who's late.

Where this stops working

Terms live on invoices, and stock lives on shelves, and the two are kept in different places. The store that pays in 50 days instead of 30 keeps getting deliveries, the margin on its orders is never worked out, and nobody can say how much of the business's cash is sitting in the walk-in as chips waiting for a customer who pays late.

How TaroStack does it

TaroStack keeps the stock and the orders behind every invoice, and shows what each customer is worth.

Customers, with their terms. Each customer carries its terms, its own shelf-life requirements, its ship-from site and its contacts. Sales orders show whether the stock to fill them is on the shelf while you're still typing, and delivery notes print with each line's lot and best-before date.

Margins by customer. Margins are reported by product and by customer, on what things really cost, so what each account earns you is a figure, and a store that pays late and asks for the lowest price can be weighed on facts, not a feeling.

And the cash on the shelf. Stock value is shown by site and month, and the reorder list works in days of cover, with reorder points suggested from how stock actually moves, so less cash waits on the shelf. Suppliers carry their payment terms, lead times and minimums too. Your invoices stay in your accounting software; you can import your QuickBooks or Xero lists to start.

Customers, sales orders, delivery notes and margins by customer are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

What does net 30 mean?

The customer pays the full invoice within 30 days of the invoice date. An invoice dated October 12 on net 30 is due November 11.

What does 2/10 net 30 mean?

The customer can take 2% off by paying within 10 days; otherwise the full amount is due in 30 days. As a yearly rate, the discount costs the seller about 37%.

How do you calculate a net 30 due date?

Add 30 days to the invoice date. Write the due date itself on the invoice, so there's no question about when it's due.

Should a small business offer net 30 terms?

Often, because wholesale customers expect them. Start new accounts prepaid or on delivery, ask for a credit application, set a limit, and offer net 30 once they've paid on time.