2/10 Net 30 Explained
Early Payment Discount Terms
2/10 Net 30 means “take a 2% discount if you pay within 10 days; otherwise, pay the full amount within 30 days.” It's one of the most effective ways to incentivize faster payment in B2B relationships.
2/10 Net 30 Definition
2/10 Net 30 (read as “two-ten net thirty”) is a trade credit term where the buyer receives a 2% discount on the invoice amount if payment is made within 10 days of the invoice date. If the discount is not taken, the full (net) amount is due within 30 days.
Percent discount
Days to claim discount
Days until full amount due
How 2/10 Net 30 Works
Invoice is issued with 2/10 Net 30 terms
The vendor sends an invoice stating "2/10 Net 30" — meaning the buyer gets a 2% discount if they pay within 10 days, or must pay the full amount within 30 days.
Discount window: Days 1-10
During the first 10 days, the buyer can pay the discounted amount. On a $10,000 invoice, that means paying $9,800 — saving $200.
Full payment window: Days 11-30
If the buyer doesn't pay within 10 days, the discount expires. The full $10,000 is due by day 30.
Overdue: After day 30
After day 30, the invoice is overdue and may incur late fees per the contract terms.
2/10 Net 30 Discount Examples
How much you save (or your customer saves) by paying within 10 days.
| Invoice Amount | 2% Discount | Pay Within 10 Days |
|---|---|---|
| $5,000 | -$100 | $4,900 |
| $10,000 | -$200 | $9,800 |
| $25,000 | -$500 | $24,500 |
| $50,000 | -$1,000 | $49,000 |
| $100,000 | -$2,000 | $98,000 |
The cost of skipping the discount: If a buyer doesn't take the 2% discount on a $10,000 invoice, they're effectively paying $200 to keep their money for an extra 20 days (day 10 to day 30). Annualized, that's a 36.5% cost of capital — far more expensive than most credit lines.
Common Variations
2/10 Net 30 is the most common early payment discount, but there are several variations.
1% discount if paid in 10 days, otherwise full amount due in 30 days. Annualized value of taking the discount: ~18.4%.
2% discount if paid in 15 days, otherwise due in 30. The longer discount window makes it easier for buyers to capture; annualized value: ~49.7% over the remaining 15 days.
2% discount if paid in 10 days, otherwise due in 60. Annualized value drops to ~14.9% because the full-payment window is 50 days longer.
3% discount if paid in 10 days, otherwise due in 30. Aggressive — annualized value ~56.4%, used when the seller strongly needs cash acceleration.
A half-percent (0.5%) discount if paid in 10 days, otherwise due in 30. Written as "1/2/10 Net 30" or "½/10 Net 30" — the fraction is the discount, not a date.
2% discount if paid in 15 days, otherwise due in 45.
1% discount if paid in 15 days, otherwise due in 30.
2% discount if paid within 10 days after the end of the month the invoice was issued — the clock starts at month-end, not the invoice date.
"Prox" (proximo) terms: 2% discount if paid by the 10th of the following month. "10th prox" alone means full payment is due by the 10th of next month.
Plain deadlines with no discount — the full amount is due in 10 or 30 days. A term like "10 Net 30" usually indicates a garbled version of a discount term; check the contract for the intended discount percentage.
Tracking early payment discounts across contracts
When some contracts offer 2/10 Net 30 and others are straight Net 30, your team needs to track which invoices qualify for discounts, whether the buyer paid in time, and how to record the discount. This adds complexity to both invoicing and accounting.
LedgerUp reads discount terms from each contract and automatically applies the correct amount when early payment is received. No manual tracking, no missed discounts, no reconciliation headaches.
2/10 Net 30 FAQ
What does 2/10 Net 30 mean?
2/10 Net 30 is a payment term that offers a 2% discount if the buyer pays within 10 days of the invoice date. If they don't take the discount, the full invoice amount is due within 30 days. It's read as "two-ten net thirty."
What is the annualized cost of not taking the 2/10 Net 30 discount?
Not taking a 2/10 Net 30 discount is equivalent to paying approximately 36.7% annualized interest. The math: you're paying 2% more to keep your money for an extra 20 days (day 10 to day 30). That's 2% ÷ 20 days × 365 days = 36.5% annualized. In almost all cases, it's better to take the discount — even if you need to borrow to do it.
Should I offer 2/10 Net 30 to my customers?
Offer 2/10 Net 30 if you want faster cash collection and are willing to accept a 2% revenue reduction on invoices paid early. It's most effective when: (1) your DSO is high and you need to improve cash flow, (2) your customers have the cash to pay early, and (3) the 2% discount is less than the cost of carrying receivables for 30 days.
How do I record a 2/10 Net 30 discount in accounting?
When a buyer takes the early payment discount, the vendor records the discount as a contra-revenue or sales discount. For example, on a $10,000 invoice paid within 10 days: debit Cash $9,800, debit Sales Discounts $200, credit Accounts Receivable $10,000.
What if a customer pays on day 11 — do they still get the discount?
Strictly, no — the discount window closes after day 10. However, some vendors grant a grace period (usually 1-2 days) to maintain good customer relationships. This should be handled consistently to avoid disputes. Clear contract language helps: "Discount applies to payments received within 10 calendar days of the invoice date."
Does 2/10 Net 30 mean a 20% discount?
No — this is a common misreading. The "2" in 2/10 Net 30 is a 2% discount, not 20%. The notation reads: discount percentage, then discount window in days, then the full-payment deadline. A 20% early payment discount would be economically extraordinary — it would annualize to roughly 365% interest for paying 20 days early.
What does 1/10 Net 30 mean?
1/10 Net 30 offers a 1% discount if the invoice is paid within 10 days; otherwise the full amount is due within 30 days. On a $10,000 invoice, paying by day 10 costs $9,900. Forgoing the discount is equivalent to paying about 18.4% annualized interest to keep your money for the extra 20 days — half the cost of skipping a 2/10 discount, but usually still worth taking.
What does 2/15 Net 30 mean?
2/15 Net 30 offers a 2% discount if paid within 15 days, with the full amount due in 30 days. The wider 15-day window makes the discount easier for buyers with slower AP processes to capture. Skipping it costs roughly 49.7% annualized, because you are paying 2% to hold the cash for only 15 more days.
What do "prox" or "EOM" payment terms mean?
"Prox" (short for proximo, meaning "next month") and EOM (end of month) terms start the payment clock at the month boundary instead of the invoice date. "2/10th prox" means a 2% discount if paid by the 10th of the following month; "10th prox" alone means full payment is due by the 10th of next month; "2/10 EOM" means a 2% discount if paid within 10 days after month-end. They are common in distribution and retail, where buyers batch all of a month's invoices into one payment run.
Automate payment terms across every contract
LedgerUp handles 2/10 Net 30, Net 15, Net 60, and any other terms — automatically.
Book a LedgerUp demo