← Invoice payment terms calculator
Freelancers search this after a client asks for a discount to pay faster, or after they copy “2/10 Net 30” from someone else’s invoice. Two percent off for payment in ten days looks cheap until you price the cash you give up against the cash you wait for.
The discount is $24. The wait is 20 days. On the calculator defaults — a $1,200 invoice, 2% for payment in 10 days, Net 30 for the full amount — early cash is $1,176.00. Waiting pays $1,200.00.
24% money still leaves waiting ahead. A card or operating line at 24% models $7.73 of carrying cost on the $1,176 you could have on day 10, and $23.67 on the $1,200 you wait 30 days for. Early-pay leaves $1,168.27. Waiting leaves $1,176.33 — $8.06 ahead. They match at about 36.1%.
Expensive capital flips the table. At 50%, the same discount leaves $1,159.89 and waiting leaves $1,150.68. Cheap 6% money still covers the wait by about $20.
| Path | Wait | Cash | Carrying at 24% | After float |
|---|---|---|---|---|
| 2% / 10 days | 10 days | $1,176.00 | $7.73 | $1,168.27 |
| Wait Net 30 | 30 days | $1,200.00 | $23.67 | $1,176.33 |
Carrying cost is your assumption, not a late fee and not interest you can invoice. The 37.2% APR is the buyer’s annualized cost of skipping the discount, not a rate you charge. Confirm any term against the contract you actually send. This page does not tell you to offer or withhold 2/10 Net 30.
A third-party factor fee is a different question — Should I factor this invoice? prices the advance, not a discount you give the client. A Faire marketplace Pay Now discount is also a different question — Should I offer Faire Pay Now? prices a brand-funded early-pay percent against Faire remittance wait, with no client Net 30 invoice in the middle. Open the invoice payment terms calculator, type your own rate, and see whether the discount still covers the wait.
On the calculator defaults — a $1,200 invoice, 2% off for payment in 10 days, and a 24% annual carrying-cost assumption — the discount leaves $1,168.27 after $7.73 of modeled float. Waiting 30 days for $1,200 leaves $1,176.33. The $24.00 discount does not cover 24% money sitting the extra 20 days. This is not a recommendation to offer or withhold the discount.
When your money is expensive. At a 50% annual carrying-cost assumption the same invoice leaves $1,159.89 after the discount and $1,150.68 after waiting. Early-pay and waiting match at about 36.1%. Enter the rate you actually pay on a card, line, or opportunity cost.
Giving up 2% to keep the cash 20 extra days is about 37.2% annualized for the buyer. That is the cost of not taking the discount, not a rate you can invoice and not a reason to offer it.