Net 60
Is Net 60 always 60 days from delivery?
No. The standard interpretation is 60 days from the invoice date, but some contracts define the start from receipt of goods, shipment, or end of month.
How does Net 60 affect DPO and DSO?
It increases the buyer's days payable outstanding by extending payment timing and increases the seller's days sales outstanding because the receivable remains open longer.
Why does Net 60 matter in ERP and warehouse control?
Because the due date, goods receipt date, invoice date, and inventory availability date are separate events. If master data is wrong, the system can misstate liabilities, overdue payables, and inventory commitment status.
Net 60 is a trade credit payment term requiring the buyer to pay an invoice in full within 60 calendar days, typically counted from the invoice date unless a contract specifies another trigger such as receipt of goods or month-end. It functions as short-term supplier financing, allowing buyers to defer cash outflow while improving working capital and days payable outstanding.
On a manufacturing shop floor, Net 60 lets a plant receive and consume material before paying for it, which is especially useful for recurring MRO, packaging, metals, chemicals, and component buys with stable suppliers. The receiving team posts goods receipt in the ERP or WMS, inventory moves to putaway and production issue, and accounts payable schedules payment at day 60 based on term definitions in the supplier master or invoice header. This arrangement supports higher safety stock and smoother line feeding because immediate cash pressure is reduced. However, material tracking becomes more demanding: receipt date, invoice date, and consumption date must align, or the three-way match breaks, GR/IR balances distort, and financially unsettled stock appears physically available. Net 60 is only effective when receiving accuracy, lot control, and supplier lead-time discipline prevent the deferred payment from masking real inventory problems.
Invoice-date versus receipt-date mismatch: Payment clocks start from the invoice while the contract intended receipt of goods or month-end, producing disputes, late fees, and blocked shipments when accounts payable follows the wrong trigger.
Overbuying from deferred cash: Net 60 makes large purchase orders look affordable, but softened demand or schedule changes leave obsolete stock, higher carrying costs, and lost warehouse space for critical parts when material sits beyond its need.
Three-way-match breakdowns: Delayed receiving, miscounted quantities, or incomplete lot data leave invoices unmatched while the due date ages, forcing premature payment, supplier holds, or production shortages when inventory records no longer match physical stock.