TIPS60 - Using 2/10 Net 30 to Incentivize Faster Payment

Here is another of our videos offering tips and inisights into the business of photography. a transcript of the video is included after the jump.

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TRANSCRIPT:Here's an explanation of 2/10 Net 30. I'm John Harrington. 2/10 Net 30 is an accounting term that tells you as the buyer of a product the you can take a two percent discount from the total bill, the total invoice, if you pay in ten days. Otherwise, the net amount is due in thirty days. So if you are sending a bill to a client and you place on the bill 2/10 Net 30 you're trying to provide that client with the incentive to pay that bill within ten days of receipt and therefore allowing them to take a two percent discount. Now a two percent discounts not a big deal when you're talking about a hundred dollars, it's two dollars, thousand dollars, is twenty dollars, so 2/10 Net 30 is really a good incentivisation to give clients to get them to pay you on time or early in this case. So 2/10 Net 30 is a really good accounting tool to get clients to pay you on time or early.

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