Net 15 days on an invoice means the buyer owes the full invoice balance within 15 calendar days. “Net” refers to the total amount due after any credits or adjustments have already been applied, and the “15” tells you how many days you have to pay before the invoice is past due.1Wikipedia. Net D It’s essentially a short, interest-free loan from the seller: they deliver the goods or complete the work, and you get a brief window to process the bill before consequences start.
Net 15 is on the tighter end of standard business-to-business terms. Freelancers, consultants, and small suppliers lean on it because they can’t afford to wait a month or more for cash to come in.
How to Count the 15 Days
The clock usually starts on the invoice date. An invoice dated June 3 is due by June 18. Some contracts set a different starting point, like the shipping date or the date you actually received the goods, but the invoice date is the default unless your agreement says otherwise.1Wikipedia. Net D
You count all 15 days consecutively, weekends and holidays included. If the final day falls on a Saturday, Sunday, or public holiday, standard practice is to move the deadline to the next business day, since banks and payment processors don’t settle on closed days.
Watch out for one easy mistake: Net 15 means 15 calendar days, not 15 business days. Fifteen business days runs closer to three full weeks. If you schedule payments on a working-day basis, you’ll miss the deadline by nearly a week.
Early Payment Discounts on Net 15 Invoices
Some Net 15 invoices offer a discount for paying ahead of schedule. A supplier might write terms as “1/5 Net 15,” meaning you get a 1% discount if you pay within five days, with the full amount due by day 15. The same structure shows up at other term lengths; the widely used “2/10 Net 30” works the same way.1Wikipedia. Net D
Small as those percentages look, they annualize into real money. On a $10,000 invoice with 2/10 Net 30 terms, paying $9,800 on day 10 instead of $10,000 on day 30 saves $200 over a 20-day window, which works out to roughly 36% on an annualized basis. Businesses with the cash on hand usually take these discounts because very few risk-free uses of money deliver that kind of return.
What Happens If You Pay Late
Missing a Net 15 deadline typically triggers one of two penalties, depending on what the invoice or underlying contract says.
The first is recurring interest on the unpaid balance, commonly 1% to 1.5% per month, which annualizes to 12% to 18%. The second is a flat late fee charged once when the invoice goes overdue, often somewhere between 2% and 5% of the invoice total. Whether a seller can actually enforce these charges depends on the terms you agreed to and, in some cases, state law. Maximum allowable interest rates on commercial debts vary significantly by state, running from as low as 5% to as high as 45% annually, though many states have no statutory cap for business-to-business agreements.
The harder consequence usually isn’t the fee. It’s losing your credit terms altogether. After a missed payment, the seller may require cash on delivery or prepayment for future orders until the overdue amount clears. For a business that relies on trade credit to manage cash flow, being pushed onto prepayment terms is far more disruptive than a monthly interest charge.
How Net 15 Compares to Other Payment Terms
The number after “net” is the only thing that changes across standard terms. They all work the same way: pay the full balance within the stated number of calendar days.
- Net 7 means payment is due in seven days, used for small transactions or when the seller has limited cash reserves.
- Net 15 means payment in 15 days, common for freelancers, consultants, startups, and small suppliers who need faster cash flow.
- Net 30 means payment in 30 days, and it’s the most widely used standard in business-to-business commerce, especially among wholesalers, marketing firms, and healthcare providers.
- Net 60 and Net 90 mean payment in 60 or 90 days, typical in construction, telecommunications, and large-scale infrastructure work where contracts are bigger and cash cycles are longer.
Sellers pick terms based on how long they can afford to wait. A freelance designer finishing a $3,000 project has different liquidity needs than a construction materials supplier filling a six-figure order. Buyers, on their side, prefer longer terms because holding cash longer improves their working capital.
If the Customer Is a Federal Agency
Net 15 on an invoice to a federal agency doesn’t control the payment date. Federal payments are governed by the Prompt Payment Act, which sets a default deadline of 30 days after the agency receives a proper invoice, unless the contract specifies otherwise.2Office of the Law Revision Counsel. 31 US Code 3903 – Regulations Certain categories get faster treatment: meat and fish products must be paid within seven days of delivery, and dairy products within 10.3eCFR. 5 CFR 1315.4 – Prompt Payment Standards and Required Notices to Vendors
Small business prime contractors get a relevant provision: agency heads are directed to establish an accelerated payment goal of 15 days after receiving a proper invoice.2Office of the Law Revision Counsel. 31 US Code 3903 – Regulations The same accelerated goal applies when a prime subcontracts with a small business, provided the prime agrees to pass the faster payment through. When the government pays late, interest accrues automatically, so you don’t need to chase a federal agency for late fees the way you would a private customer.
If You’re the One Setting Net 15 on Your Invoices
Net 15 fits best when your cash flow is tight and you can’t absorb a 30- or 60-day wait. The tradeoff is that a shorter window can push away customers used to more breathing room. Pairing Net 15 with an early payment discount softens the pressure: a term like “1/5 Net 15” rewards faster payment while keeping 15 days as the firm outer boundary. Whichever direction you go, spell the term out clearly on the invoice and in your underlying contract, along with any late fee or interest rate you intend to charge, so both sides know what’s expected before the first invoice goes out.