Net 30 is a short term of credit that the merchant extends to the buyer. Usually, Net 30 on an invoice is used when a job is complete, e.g. a product or service has been sold but the payment has not been made in full. The 30 day period includes the time products spend in transit to the end-consumer.
An advantage of using a Net 30 invoice payment term is that buyers are more incentivized to purchase if there is an option to delay payment.
On the flip side, Net 30 or longer payment terms can be dangerous for a small business. While larger businesses are more likely to have regulated cashflow, smaller businesses might not have the resources to wait on invoices, especially if the buyers have a different understanding of what the payment term means.
Some buyers might assume that the transit or shipping time is not included in the 30 day period. Some may assume that the 30 days start from the time the invoice is received rather than from the time the goods and services were provided.