What Does 2/15 n/30 Mean on an Invoice?

Businesses frequently extend credit to their customers, allowing them to receive goods or services immediately and pay at a later date. This arrangement, known as trade credit, is a common practice in business-to-business transactions. To clearly define the expectations for these delayed payments, specific notations are used on invoices. One such common notation that specifies both a potential discount and a final due date is “2/15 n/30”. This term provides a framework for when payment is expected and under what conditions a reduced amount might be accepted.

Decoding the Discount Term (2/15)

The initial part of the payment term, “2/15,” refers to a potential discount for early payment. The “2” in this notation signifies a 2% discount that the buyer can deduct from the total invoice amount.

The “15” indicates the number of days from the invoice date within which the payment must be made to qualify for this 2% discount. For instance, if an invoice is dated August 1st, the buyer would have until August 16th to pay and receive the discount.

Understanding the Net Term (n/30)

The second part of the payment term, “n/30,” clarifies the ultimate deadline for the full invoice amount. The “n” stands for “net,” which means the full, undiscounted amount of the invoice. This is the total sum due if the buyer chooses not to, or is unable to, take advantage of the early payment discount.

The “30” in “n/30” represents the total number of days from the invoice date by which the full net amount is due. Regardless of whether an early payment discount was available or utilized, the entire invoice amount must be settled by this 30-day mark.

Applying the Terms to an Invoice

Applying the terms “2/15 n/30” to a hypothetical invoice illustrates how these conditions work in practice. Consider an invoice issued on August 1, 2025, for a total amount of $1,000. The payment terms specify a 2% discount if paid within 15 days, with the full net amount due in 30 days.

If the buyer pays the invoice on or before August 16, 2025 (within 15 days of the invoice date), they can calculate the discount by multiplying the invoice total by 2% ($1,000 0.02 = $20). The buyer would then pay the discounted amount of $980 ($1,000 – $20).

However, if the payment is not made within this 15-day discount period, the discount opportunity is forfeited. In this scenario, the full $1,000 remains due. The final deadline for paying the entire $1,000 would be August 31, 2025 (30 days from the invoice date).