Glossary · Payment terms
Net 90
Net 90 means the full invoice amount is due within 90 days of the invoice date: three months of credit from the supplier to the buyer.
Under net 90 terms, an invoice dated 1 April is due on 30 June. Long terms like this are typically imposed by large buyers on smaller suppliers, especially in retail, manufacturing and parts of the public sector outside the EU.
For the supplier, net 90 is expensive. Every invoice is effectively a three-month interest-free loan, and the risk grows with it: a customer that runs into trouble has had three months of your work before anything is even overdue.
In the EU, terms over 60 days must be expressly agreed and must not be grossly unfair to the supplier, so a buyer can’t simply impose net 90 in its own terms. Where long terms are unavoidable, suppliers use supply chain finance, invoice finance or early-payment discounts to get paid sooner.
Example
A €30,000 invoice on net 90 costs a supplier that borrows at 8% about €590 in financing (€30,000 × 8% × 90/365) before the money arrives.