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A supplier invoice rarely comes with just one price. The terms printed at the bottom — Net 30, 2/10 Net 30, Net 60 — change what you actually pay and when the money leaves your account. A small discount for paying early can look tiny on one invoice, yet over a full year of orders it can add up to real money. On the other hand, paying early when cash is tight can hurt more than the discount helps. This free payment terms comparison tool puts the common options side by side so you can see the numbers before you decide.
What the tool compares
Enter your invoice amount and the tool compares five common sets of terms: 2/10 Net 30, 1/15 Net 30, Net 30, Net 60 and Net 90. For each option it shows what you pay if you take the early discount, what you pay in full, how much you save, and the yearly cost of skipping the discount. That last figure matters most. It answers a simple question: if you pass up a 2 percent discount to hold the money for 20 extra days, what yearly interest rate is that choice equal to? When that rate is high, paying early is usually the smart move, as long as your cash flow allows it.
How to use it
- Type the invoice amount in the first box and pick your currency.
- Click Compare terms to see all five options in one table.
- Look at the saving column first, then at the yearly cost column.
- Pick the option with the lowest early payment that still leaves you enough cash for other bills.
- Repeat the check for large invoices, where even 1 percent is a large sum.
Why the yearly cost matters
Suppliers offer early payment discounts because getting paid sooner is worth something to them. When you skip the discount, you are in effect borrowing that money from the supplier until the net date, and the discount you gave up is the price of that loan. A 2/10 Net 30 discount skipped means paying 2 percent extra to keep the money for 20 days. Repeated over a year, that works out to roughly 36 percent a year, which is far more than most bank loans or credit lines cost. That is why finance guides often say: take the discount unless you truly cannot pay, or unless your other borrowing is even more expensive.
A worked example
Take a 1,000 dollar invoice on 2/10 Net 30 terms. Pay within 10 days and you pay 980 dollars, saving 20 dollars. Wait until day 30 and you pay the full 1,000 dollars. On one invoice the saving looks small. But if you receive a similar invoice every month, taking the discount each time saves 240 dollars a year. Now compare Net 60 with no discount: you keep the money longer, which helps cash flow, but you save nothing. The tool shows both sides of that trade-off in plain numbers, so the choice is no longer a guess.
Tips for small businesses
First, check whether your supplier actually offers a discount — many small firms never ask, and some suppliers will add one if you request it. Second, never pay early with money you need for wages, rent or tax bills due sooner. Third, if you use a business credit card or overdraft to pay early, compare its interest cost with the discount saving; the discount usually wins, but check anyway. Fourth, keep a simple note of each supplier’s terms so you are not surprised by a short payment window. Finally, remember this tool is an educational estimator only: it does not give financial advice, and your real decision should also weigh your cash position, your bank terms and any contract rules.
Common mistakes
The most common mistake is treating Net 30 and 2/10 Net 30 as the same thing — they are not, because only the second rewards early payment. Another mistake is paying early on a tiny invoice while a large invoice with a bigger discount waits unpaid. A third is forgetting the discount deadline: day 11 is too late for a 10-day discount, and suppliers rarely extend it. Use the tool before the payment run, not after, so discounts are still within reach.
Frequently asked questions
- What does 2/10 Net 30 mean? Pay within 10 days and take a 2 percent discount; otherwise the full amount is due within 30 days.
- Is paying early always best? No. If paying early leaves you short for essential bills, wait. The discount is only worth it when cash flow allows.
- Does the tool store my figures? No. Everything runs in your browser and nothing is sent to a server.