What is Net-90?
Net-90 is a payment term meaning full payment is due within 90 days of the invoice date — a long payment window most common in government and manufacturing sectors.
Definition
Net-90 is a payment term indicating that the full invoice amount is due within 90 calendar days of the invoice date. The countdown begins on the invoice date, not the date of receipt or any other date. At the end of 90 days, the net (full) invoice amount is due. Net-90 is one of the longest standard payment terms in commercial use and is most common in industries with extended sales cycles, complex approval hierarchies, or government procurement processes.
When Net-90 Is Used
Net-90 is most commonly found in: government contracts and public sector procurement, where lengthy approval chains and budget cycles make shorter terms impractical; manufacturing and industrial supply chains, where large equipment or materials orders involve complex logistics and inspection processes; large enterprise B2B transactions where corporate accounts payable runs on quarterly cycles; industries with regulatory inspection requirements that must be completed before payment is authorized. In most of these contexts, Net-90 is an established industry norm that both buyers and sellers accept as the cost of doing business in that sector.
Is Net-90 Appropriate for Freelancers?
Net-90 is generally too long for freelancers and small service providers. A 90-day payment cycle means you could deliver work in Month 1 and not receive payment until Month 4 — a 90-day gap between your expense (time and resources) and income. This creates serious cash flow challenges, particularly if you have fixed monthly obligations (rent, software subscriptions, taxes). If a corporate client asks for Net-90 terms, you have leverage to negotiate. You can: request a 50% deposit upfront and the remaining 50% at Net-90; propose Net-30 or Net-60 as a compromise; suggest milestone payments tied to project phases; or decline the terms and walk away if the risk is unacceptable.
Managing Net-90 If You Must Accept It
If you do accept Net-90 terms (perhaps because the client is large and valuable), you can manage the cash flow impact by: requesting a substantial deposit (30-50%) upfront before beginning work; issuing milestone invoices at 30 and 60 days to create partial cash inflows; using a line of credit or business credit card to bridge the gap while waiting for payment; negotiating early payment discounts (e.g., 2% off if paid within 15 days) as an incentive for faster payment; sending a friendly reminder at day 75 to ensure the payment is processed in the final AP run of the 90-day period. Never start significant work on Net-90 terms without at least a deposit to cover your costs.
Key Takeaways
Net-90 means full payment is due within 90 days of the invoice date. It is standard in government, manufacturing, and some enterprise contexts, but is generally too long for freelancers. Always negotiate a deposit or milestone structure if a client requests Net-90. Send reminders at day 75 to ensure your invoice is processed in the final payment run.