This clause says you won't get paid until 60+ days after you've delivered the work (or sometimes after the invoice date). This creates cash flow problems: you've spent money doing the work, but won't see payment for 2+ months. In the UK and US, there's no legal requirement to pay faster unless the contract says so, so the other party can legally hold your money indefinitely (within reason). For small businesses, this can mean borrowing money to cover payroll while waiting for payment. For example, if you're a freelancer who invoices on January 1st with Net 60 terms, you won't be paid until early March.
Negotiate down to Net 30 (30 days) or Net 15 if possible, especially if you have cash flow concerns. If you must accept longer terms, ask for a deposit upfront (20-50% of the total) to cover your initial costs. Push back hard on Net 90+—that's unreasonable for most small businesses. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause says you won't get paid until 60+ days after you've delivered the work (or sometimes after the invoice date).
Why should I care about this clause?
This creates cash flow problems: you've spent money doing the work, but won't see payment for 2+ months.
What are my options?
In the UK and US, there's no legal requirement to pay faster unless the contract says so, so the other party can legally hold your money indefinitely (within reason).
How does this affect small businesses?
For small businesses, this can mean borrowing money to cover payroll while waiting for payment.