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, and the 15 tells you how many days you have to pay before the invoice is past due. It’s a short-term, interest-free credit window from the seller to the buyer, and it’s tighter than the more common Net 30.
How to Calculate the Due Date
The 15-day clock usually starts on the invoice date itself. An invoice dated June 3 is due by June 18. Some contracts set a different starting point, such as the shipping date or the date the buyer receives the goods, but unless your agreement says otherwise, the invoice date is the default.1Wikipedia. Net D
Count all 15 days consecutively, weekends and holidays included. When the final day falls on a Saturday, Sunday, or public holiday, standard practice is to treat the next business day as the deadline, since banks and payment processors don’t settle transactions on days they’re closed.
Calendar Days, Not Business Days
This trips people up. Net 15 means 15 calendar days, not 15 working days. Fifteen business days would run about three full weeks, closer to Net 21 in calendar terms. Schedule your payment against business days and you’ll miss the deadline by nearly a week.
Early Payment Discounts on Net 15
Some invoices reward paying ahead of schedule. A supplier working on Net 15 terms might offer “1/5 Net 15,” which gives the buyer a 1% discount for paying within five days and requires the full amount by day 15. The more familiar version of this structure is “2/10 Net 30,” a 2% discount for paying by day 10 instead of day 30.1Wikipedia. Net D
The discount looks small on paper and much larger once you annualize it. Paying $9,800 on day 10 rather than $10,000 on day 30 saves $200 over a 20-day window, an effective annualized return of roughly 36%. If your business has the cash on hand, these discounts almost always beat leaving the money parked elsewhere.
What Happens if You Pay Late
Missing a Net 15 deadline usually triggers one of two penalties, depending on what the invoice or contract specifies. The first is recurring interest on the overdue balance, commonly 1% to 1.5% per month, which works out to 12% to 18% annually. The second is a flat late fee applied once when the invoice becomes overdue, often 2% to 5% of the invoice total.
Whether the seller can actually charge these amounts depends on the terms you agreed to and, in some cases, state law. Maximum allowable interest rates on commercial debts vary significantly by state, from as low as 5% up to 45% annually, though many states set no statutory cap for business-to-business agreements.
The real cost of paying late isn’t usually the fee. It’s losing your credit terms. After a missed deadline, a supplier can require cash on delivery or prepayment on future orders until the overdue balance clears. For a business that relies on trade credit to manage cash flow, being pushed onto prepayment is far more disruptive than a 1.5% monthly interest charge.
How Net 15 Compares to Other Net Terms
The number after “net” is the only thing that changes. Each variant works the same way: pay the full balance within that many calendar days.
- Net 7: payment due in 7 days, common for very small transactions or when the seller has limited cash reserves.
- Net 15: payment due in 15 days, frequently used by freelancers, consultants, startups, and small suppliers who need faster cash flow.
- Net 30: payment due in 30 days, the most widely used standard in B2B commerce, especially among wholesalers, marketing firms, and healthcare providers.
- Net 60 and Net 90: payment due in 60 or 90 days, typical in construction, telecommunications, and large-scale infrastructure projects.
Sellers pick their 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 generally prefer longer terms because holding cash longer improves their working capital position.
When the Customer Is a Federal Agency
If you invoice a federal agency, the terms on your invoice don’t control payment timing. The Prompt Payment Act does. The default deadline is 30 days after the agency receives a proper invoice, unless the contract specifies a different date.2Office of the Law Revision Counsel. 31 US Code 3903 – Regulations Certain categories are paid faster: meat and fish products within 7 days of delivery, dairy products within 10 days.3eCFR. 5 CFR 1315.4 – Prompt Payment Standards and Required Notices to Vendors
Small business contractors get a specific provision worth knowing. The law directs agency heads to set an accelerated payment goal of 15 days after receiving a proper invoice from a small business prime contractor. The same 15-day goal applies when a prime contractor subcontracts with a small business, provided the prime agrees to pass the faster payment through.2Office of the Law Revision Counsel. 31 US Code 3903 – Regulations When a federal agency pays late, interest accrues automatically, so unlike a private customer, you don’t have to chase them for it.
If You’re the One Issuing Net 15 Invoices
Net 15 makes the most sense when your cash flow is tight and you can’t afford to wait a month or two for payment. The tradeoff is that shorter terms can deter customers who expect more breathing room. An early payment discount softens that pressure. A “1/5 Net 15” term gives the buyer a reason to pay in five days while keeping 15 as the outer boundary.
On the buyer side, the strongest leverage for negotiating longer terms is a payment track record. Consistent on-time payments, growing order volumes, and financial stability all give a supplier reason to extend more generous credit. The time to negotiate is before you sign, not after. Once the contract is locked in, the supplier has much less incentive to move.