Early Payment Discount (2/10 Net 30)
An early payment discount rewards the buyer for paying before the due date.
An early payment discount offers the buyer a percentage off for paying early — the classic form is 2/10 Net 30: take 2% off if you pay within 10 days, otherwise the full amount is due in 30 days. Sellers trade a small margin for faster cash; buyers earn an effective return far above most savings rates by paying early.
Example
On a $5,000 invoice with 2/10 Net 30 terms, paying within 10 days reduces the bill to $4,900.
Related terms
Frequently asked questions
Is taking a 2% early payment discount worth it?
Usually yes. Paying 20 days early to save 2% is equivalent to an annualised return well above typical savings rates — it is one of the cheapest forms of return a buyer can earn.
Must the discount be stated on the invoice?
Yes — the terms (for example, '2/10 Net 30') should appear on the invoice or in the agreed contract. A buyer cannot claim a discount that was never offered.
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