1%/10 net 30

AAA

DEFINITION of '1%/10 net 30'

A way of providing cash discounts on purchases. It means that if the bill is paid within 10 days, there is a 1% discount. Otherwise, the total amount is due within 30 days.

For example, if "$1000 1/10 net 30" is written on a bill, the buyer can take a 1% discount ($1000 x .01 = $10) and make a payment of $990 within 10 days, or pay the entire $1000 within 30 days.

INVESTOPEDIA EXPLAINS '1%/10 net 30'

Manufacturers offer discounts like this to encourage retailers to pay quickly.

This calculation is the same regardless of what discount is used. For example "2/10 net 30" just means there is a 2% discount.

RELATED TERMS
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to ...
  2. Current Liabilities

    A company's debts or obligations that are due within one year. ...
  3. Retail Prices Index - RPI

    One of the two main measures of consumer inflation produced by ...
  4. Copyright Infringement

    The use or production of copyright protected material without ...
  5. ISDA Master Agreement

    A standard agreement used in over-the-counter derivatives transactions.
  6. Contingency Clause

    A contract provision that requires a specific event or action ...
Related Articles
  1. Easy Ways To Cut Rental Costs
    Options & Futures

    Easy Ways To Cut Rental Costs

  2. What is an alienation clause?
    Investing

    What is an alienation clause?

  3. ISDA Master Agreement
    Investing Basics

    ISDA Master Agreement

  4. 4 Contract Essentials You Need to Know
    Budgeting

    4 Contract Essentials You Need to Know

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center