Dating terms: Overview, definition, and example
What is dating terms?
Dating terms refer to the way payment due dates are calculated based on the date of an invoice or delivery. In other words, it's how a seller sets the clock for when a buyer’s payment is expected. Common dating terms include "Net 30," "Net 60," or special terms like "2/10, Net 30," which offer early payment discounts.
In plain terms, dating terms answer the question: “When is this bill due, and do I get a discount for paying early?”
Why is dating terms important?
Clear dating terms help manage cash flow on both sides of a transaction. For sellers, it sets expectations for when they’ll get paid. For buyers, it provides a timeline and sometimes an incentive to pay early.
If dating terms aren’t spelled out clearly in a contract or invoice, it can lead to payment delays, disputes, or confusion—especially if delivery and invoicing happen at different times.
For SMBs, understanding and negotiating dating terms can help improve liquidity, avoid late fees, and take advantage of early payment discounts.
Understanding dating terms through an example
Let’s say you run a wholesale bakery that supplies local cafés. You send an invoice dated April 1 with dating terms that say “2/10, Net 30.”
That means:
- The full amount is due by May 1 (30 days from the invoice date).
- But if the café pays by April 11 (within 10 days), they get a 2% discount.
If they pay early, you get cash in the door faster, and they save money—a win-win. These kinds of dating terms help encourage prompt payments.
An example of a dating terms clause
Here’s how a dating terms clause might appear in a purchase or service agreement:
“Invoices shall be payable within thirty (30) days of the invoice date (Net 30). Early payments made within ten (10) days shall be eligible for a two percent (2%) discount off the total invoice amount (2/10, Net 30).”
Conclusion
Dating terms are a simple but powerful part of doing business. They set the schedule for payment, offer incentives for early action, and help both buyers and sellers manage cash more effectively.
If you’re sending or receiving invoices, always read the dating terms carefully—and make sure they’re clearly stated in your contracts and payment policies. A well-structured dating term can improve your bottom line and build better financial discipline on both sides.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.