When small businesses send out invoices to clients, they typically include payment terms on the invoices to ensure that clients pay the amount due within reasonable time. Sometimes, as a way to improve cash flow, small businesses offer discount terms to clients to encourage them to pay early.
The payment term net 30 indicates that the client should pay the invoice in full within 30 days of the invoice date. The payment term 2/10 net 30 includes a discount term. It indicates the client needs to pay the invoice in full within 30 days of the invoice date. However, the client receives a 2% discount if the invoice is paid in full within 10 days of the invoice date.