2/10 Net 60 payment terms: meaning, due date and discount cost

2/10 Net 60 at a glance

Type

Early-payment discount

Discount

2% if paid within 10 days

Full amount due

60 days after the invoice date

Cost of skipping the discount

14.9% a year simple, 15.9% compounded

Also written

2/10 n/60, 2% 10 net 60

Example dates

What the discount is worth

Skipping the discount buys 50 more days to pay, at a cost of 2% of the invoice: 14.9% a year as a simple rate (2/98 × 365/50), or 15.9% compounded.

Average amount owed to the supplier

Paying on the due date, about 60 days after the invoice date on average.

Setting up 2/10 Net 60 in your ERP

Business Central

Due Date Calculation 60D; Discount Date Calculation 10D, Discount % 2

Xero

Bills due 60 day(s) after the invoice date

NetSuite

Term with Days Till Net Due 60, % Discount 2, Days Till Discount Expires 10

QuickBooks Online and Sage Intacct also store payment terms with a due rule. Whether an early-payment discount is applied to the bill automatically differs by product (Sage Intacct AP terms can carry one; Xero terms set due dates only), so check the bill's due date and amount after setting up a new term.

What it means

2/10 Net 60 is a supplier payment term with a discount. The buyer may take a 2% discount by paying within 10 days of the invoice date; otherwise the full amount is due in 60 days. It also appears as 2/10 n/60 or 2% 10 net 60. On a $1,000 invoice the discount is $20, so paying early costs $980. On a $10,000 invoice the discount is $200, so paying early costs $9,800. On a $100,000 invoice the discount is $2,000, so paying early costs $98,000.

The discount is a choice, not an automatic reduction. If AP pays after the 10-day discount window, the invoice is paid at full amount and the 2% is gone. The trade is 2% for 50 days of credit given up. The cost of skipping the discount is 14.9% simple annual and 15.9% compounded annual. That figure belongs next to your own cost of funds when AP and treasury review payment timing.

The term must be read from the vendor record and the invoice together. A vendor record set to Net 60, or an invoice keyed as 2/10 Net 30, changes both the discount date and the full due date. The net period here is 60 calendar days from the invoice date, not from month end and not from the date the invoice arrives in the mailbox.

Working out the dates

Count from the invoice date. An invoice dated Thursday, Jan 15, 2026 has a discount until Sunday, Jan 25, 2026. The full amount is due Monday, Mar 16, 2026, which is 60 calendar days from the invoice date. AP should schedule the payment so it settles by the discount date if the discount is being taken.

An invoice dated Friday, Feb 27, 2026 has a discount until Monday, Mar 9, 2026. The full amount is due Tuesday, Apr 28, 2026. An invoice dated Friday, Dec 18, 2026 has a discount until Monday, Dec 28, 2026, and the full amount is due Tuesday, Feb 16, 2027. In each case the 60 days run from the invoice date.

The received date is not the trigger. If the Dec 18 invoice reaches AP on Dec 22, the discount window still ends Dec 28. Counting 10 days from Dec 22 would put the clerk past the real window and create a discount claim the supplier can reject. Month-end also does not reset the count. The term is not 2/10 Net 60 from statement date, and it is not a next-month due date.

Is the discount worth taking?

The discount is 2% for paying 50 days early. On a $1,000 invoice the discount is $20 and the early payment is $980. On a $10,000 invoice the discount is $200 and the early payment is $9,800. On a $100,000 invoice the discount is $2,000 and the early payment is $98,000. The question is whether those amounts are worth the cash freed by waiting to day 60.

The cost of skipping the discount is 14.9% simple annual and 15.9% compounded annual. Compare 14.9% with your own cost of funds. If the discount is not taken, AP pays the full invoice and keeps the cash for the 50 extra days. That is a financing decision, not a bookkeeping one.

Cash flow matters at the spend level. With $250,000 a year of spend with one supplier, about $41,096 is owed on average, $20,548 more than on Net 30. With $1,000,000 a year of spend with one supplier, about $164,384 is owed on average, $82,192 more than on Net 30. With $5,000,000 a year of spend with one supplier, about $821,918 is owed on average, $410,959 more than on Net 30. Those balances are the reason a controller may set a policy for 2/10 Net 60 rather than let each clerk decide.

Where these invoices go wrong

Keying the wrong term is common. A clerk sees 2/10 n/60 on the invoice but the vendor record says Net 60, so the discount is never claimed. The reverse also happens: a vendor record still carries 2/10 Net 30 from an old agreement, and AP pays early without earning the 2%. Match the term on the invoice to the vendor record before the payment run and flag any difference.

Counting from the received date instead of the invoice date is the quiet error. An invoice dated Friday, Feb 27, 2026 has a discount until Monday, Mar 9, 2026. If it is received on Mar 3 and the clerk counts 10 days from receipt, the discount claim can be dated after the real window. Taking a discount after the window is not a valid claim; the supplier can reject it, and AP has to clear the short payment.

Paying a statement as well as the invoice is another duplicate source. AP pays the individual invoice in one run, then pays the supplier statement that still includes the invoice in a later run. Paying a re-sent invoice twice happens when the supplier emails a copy with a new message and no one checks the invoice number, date and amount against open items. Before paying, match the invoice number and invoice date, and clear the statement against invoices already paid.

Questions