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Payment Terms
Net 90
Definition
Payment is due within 90 days of the invoice date.
Overview
Net 90 offers buyers three months to pay. While favorable for clients, it significantly impacts seller cash flow and is typically only used for large contracts or specific industries.
Example
A $50,000 invoice dated June 1 with Net 90 terms won't be paid until September 1.
Best Practices
Use only when necessary or negotiated with large clients. Always get deposits for long payment terms.
Common Mistakes to Avoid
Accepting without cash flow analysis
Not requiring deposits
Missing payment date
Frequently Asked Questions
How can I manage cash flow with Net 90 terms?
Consider invoice factoring, require deposits, maintain cash reserves, or negotiate progress payments.