Net-30 Cash-Flow Impact Calculator

The hidden cost of "net 30"

Long payment terms feel like a normal cost of doing business — the client says "we pay net 30" (or net 45, or net 60) and you nod. But waiting to be paid for work you've already delivered isn't free. Cash in your hand today is worth more than the same cash next month: you could use it to cover expenses, pay down a credit line, or take on the next project. The value you lose by waiting is a real, if invisible, cost — and this calculator puts a number on it.

Enter the invoice amount, the payment terms, and your cost of capital — what that money is worth to you per year. The tool estimates the carrying cost of waiting and expresses it as a percentage of the invoice.

How the cost is calculated

It's a time-value-of-money estimate: invoice × (annual cost of capital ÷ 365) × days waited. If your cost of capital is 10% and you wait 60 days to collect a $10,000 invoice, you're tying up money at roughly $164 of cost. Stretch that across every invoice, all year, and long terms quietly eat a slice of your effective rate.

What "cost of capital" means for you

There's no single right number — use whatever reflects your situation:

• If you carry debt, use the interest rate on the credit line or card you'd otherwise pay down. That's the most concrete version of the cost.
• If you don't, use the return you'd get by having the cash sooner — reinvesting in your business, or even a high-yield savings rate as a floor.
• If cash is tight, the real cost is higher than any rate suggests, because waiting forces hard tradeoffs. Weight it accordingly.

Turning the number into action

Once you can see the cost, the fixes are obvious and cheap:

• Shorten your default terms. Net 15 instead of net 30 halves the wait on every invoice.
• Take a deposit. Getting 30–50% up front removes most of the exposure.
• Bill milestones, not one lump at the end, so cash arrives throughout the project.
• Invoice immediately on delivery and accept fast payment methods.
• Compare against a discount. If net 30 costs you more than a 2% early-payment discount would, offering "2/10 net 30" can leave you ahead — check the Early-Payment Discount calculator to see the annualized cost of that trade.

What this is

A cash-flow planning estimate, not financing advice. The carrying cost depends on your own cost of capital, which is a judgment call — use the figure to compare terms and negotiate, not as a precise accounting entry.