Net 30 for freelancers: the cash-flow cost

Net 30 means payment is due 30 days after the invoice date specified in your agreement. It does not tell you when the client will approve the invoice or whether they will pay on time. Price the wait with our net terms cost calculator, then put the expected receipt date in the cash-flow forecast. Both dates matter when rent arrives before the client payment.

What 30 days costs in dollars

Assume a $5,000 invoice and an 18% annual cost for the money tied up. Our engine calculates $73.97 for 30 days: $5,000 × 18% × 30 ÷ 365. The 18% is an example borrowing or opportunity cost, not a claim about any current bank rate. A freelancer with no financing need can enter a lower rate; one carrying a card balance might enter a higher one.

The bigger problem may be the gap between doing the work and issuing the invoice. Two weeks of delivery followed by net 30 creates roughly six weeks before cash arrives, even if the client follows the terms. Send milestone invoices as work is accepted, or request a deposit before reserving the slot. Our deposit calculator models that split.

Do not give away 2% to save 20 days without checking

On the same $5,000 invoice, a 2% discount for payment within 10 days costs $100. Compared with net 30, the client gets 20 days of financing. The net terms engine puts that discount at a 37.24% annualized rate. Against the assumed 18% funding cost, the discount costs more than the wait. A small invoice with urgent payroll tomorrow could justify a different choice, but we would run that cash gap explicitly.

We would put invoice date, due date, approval contact, and payment method in the agreement before starting. Then we would send the invoice to the person who can approve it, not merely to the person who requested the work. A due date hidden in an attachment will not solve an approval bottleneck.

Checked 2026-09-26 against the IRS recordkeeping guidance: invoices and deposit records are supporting documents for business receipts. This page’s dollar figures come from our calculator and the stated $5,000, 30-day, 18% assumptions.