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Invoice terms 2 net 15

I received an invoice for $30,000 under the above terms. I've never seen this before. I'm familiar with 2/10 net 30, etc., but am wondering if the vendor intended to this. My interpretation was that we get a 2% discount if paid within 15 days and have no idea when it would be due if we paid in more than 15 days. I paid $29,400. It's a marketing agency, so there is a decent chance somebody thought this sounded like accounting language...

Answers

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

My interpretation.......They have actually shortened the payment terms (thus their AR turnover) under the "guise" (by design or not) of the 2% discount, you only have 15 days.

Steve Bennet
Title: Start-up CFO, Angel Investor and Profess..
Company: Bodega Partners
(Start-up CFO, Angel Investor and Professor, Bodega Partners) |

Thanks, Emerson. Sounds like your interpretation is the same as mine.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

I agree.

Bradford Marcus
Title: BDO/Account Executive
Company: Atwell Companies, The
(BDO/Account Executive, Atwell Companies, The) |

I agree. Look at new account agreement/ credit application or contract you signed for their terms. There are many companies that will still take the 2% past the 15 days.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Take the 2%. If I did the calculation correctly, that's equivalent to 49% annual interest rate.... 2/10 Net 30 is 36.7%....

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