Net 30 vs Immediate Payment
Enter your monthly revenue and payment terms to see the annual cost of waiting — outstanding AR, opportunity cost, cash flow gap, and how much you save by switching to Net 15 or requiring payment upfront.
Annual cost of your payment terms
$853
$10,667 always outstanding · 40 avg days to payment
Switching to Net 15 saves
$320/yr
Net 0 saves $640/yr
Switching to Net 15 saves $107/year. Requiring a 50% deposit at project start is even better.
Your Numbers
Average amount you invoice per month
The terms on your invoices
How many extra days beyond your stated terms clients typically take
Annual return you could earn on this money (HYSA ~5%, invested ~8%)
Terms Comparison
| Terms | Total Days | AR Outstanding | Annual Cost |
|---|---|---|---|
| Net 0 (immediate) | 10 days | $2,667 | $213 |
| Net 15 | 25 days | $6,667 | $533 |
| Net 30← you | 40 days | $10,667 | $853 |
| Net 60 | 70 days | $18,667 | $1,493 |
AR always in-flight
$10,667
Cash gap
1.3 mo
Hourly drag
$0.43/hr
Monthly cost
$71
How to improve your cash flow
50% deposit upfront: Require half at project start and half on delivery. Cuts your average outstanding AR roughly in half without requiring clients to pay all at once.
Early-pay discount: Offer a 1-2% discount for payment within 10 days ("2/10 Net 30"). At $8,000/month, 2% = $160/month — a small cost vs $71 in opportunity cost.
Late payment fees: Add 1.5%/month interest on overdue invoices to your contracts. Most clients won't trigger it, but it creates urgency and protects you.
Invoice immediately: Send invoices the day work is delivered or milestones are hit. Every day of delay is a free extension you gave the client.
Related Tools
Freelance vs Employee Calculator
Side-by-side comparison of a job offer vs freelance income after all taxes. Accounts for SE tax, FICA, benefits, 401k match, expenses, and retirement — the winner highlighted in emerald.
Open
W-4 Withholding Optimizer
Have a W-2 job and 1099 side income? Find out exactly how much to add on W-4 line 4c to cover your 1099 tax without paying quarterly estimates. Shows total liability, withholding gap, safe harbor status, and recommended amount per paycheck.
Open
Mileage Deduction Calculator
2024 IRS mileage rates: $0.67/mi business, $0.21/mi medical, $0.14/mi charity. Split your miles by purpose, compare standard rate vs actual expenses (gas, insurance, depreciation, maintenance), and see your tax savings and quarterly payment reduction.
Open
Tax Debt Payoff Calculator
Calculate how long it takes to pay off IRS tax debt with interest and failure-to-pay penalties. See the true cost, compare extra payment scenarios, model a one-time lump sum, and learn about IRS Fresh Start program options.
Open
Opportunity cost uses a simple annual rate applied to average outstanding AR. Actual impact varies by client payment behavior and investment returns.
You might also like
Freelance vs Employee Calculator
Side-by-side comparison of a job offer vs freelance income after all taxes. Accounts for SE tax, FICA, benefits, 401k match, expenses, and retirement — the winner highlighted in emerald.
Try it
W-4 Withholding Optimizer
Have a W-2 job and 1099 side income? Find out exactly how much to add on W-4 line 4c to cover your 1099 tax without paying quarterly estimates. Shows total liability, withholding gap, safe harbor status, and recommended amount per paycheck.
Try it
Mileage Deduction Calculator
2024 IRS mileage rates: $0.67/mi business, $0.21/mi medical, $0.14/mi charity. Split your miles by purpose, compare standard rate vs actual expenses (gas, insurance, depreciation, maintenance), and see your tax savings and quarterly payment reduction.
Try it