What does "2/10 net 30" mean?

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Payment terms 2/10 net 30, ( or 2 percent, 10 days, net 30 days) means if the customer pays the bill within 10 days of invoice date (some use receipt date), then the customer can deduct 2 percent of the value of the bill (usually excluding freight as part of the discount). Otherwise the invoice amount is due in full 30 days from invoice date or receipt date, after which interest charges may be applied.

Likewise, 3/5 net 30 means you may discount the invoice 3 percent if paid within 5 days, otherwise the full amount is due in 30 days.

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