Payment Terms Calculator

Payment Terms in Australia: What You Need to Know

Payment terms specify when an invoice must be paid after it is issued. In Australia, the most common commercial terms are Net 30 (payment due 30 days from invoice date) and EOM+30 (payment due 30 days after the end of the month in which the invoice was issued). Government and large enterprise buyers often impose 60-day terms, and the construction industry frequently uses payment schedules tied to contract milestones. Understanding which terms apply to each supplier or customer relationship is essential for accurate cash flow forecasting - a 30-day difference between Net 30 and EOM+30 on a large invoice can shift AU$50,000+ into a different month.

Early payment discounts - often expressed as "2/10 Net 30" - offer a percentage reduction if the invoice is settled within a shortened window. In this example, a 2% discount applies if payment is made within 10 days; otherwise, the full amount is due at 30 days. For buyers, the implied annualised return on taking the discount is typically 36% or more - making it one of the highest-return uses of short-term cash available to any business. Suppliers offer them to accelerate cash inflows; buyers who miss them are effectively paying a premium for longer payment terms. For businesses managing dozens or hundreds of invoices, tracking these windows manually is error-prone and the savings are routinely missed.

Payment terms also have a direct impact on your working capital position. Extending your days payable outstanding (paying suppliers later) improves your cash position - but must be balanced against maintaining good supplier relationships and avoiding late payment penalties. Australian legislation does not cap commercial payment terms the way some European countries do, though the Small Business Ombudsman has advocated for a 30-day maximum standard for payments to small suppliers from large businesses.

Worked example: the real cost of missing an early payment discount

A Perth mining services company receives a AU$48,000 invoice from its parts supplier. The supplier offers 2/10 Net 30 terms. The AP team processes the invoice on day 14 - four days after the discount window closes:

On this single invoice, the missed discount costs AU$960. If the company processes 20 similar invoices per month from various suppliers offering 2% terms, missed discounts total AU$230,400 per year. The annualised return of 37.2% far exceeds any short-term deposit rate, making it one of the most obvious cash management wins available. The fix is operational, not financial: the AP team needs to receive, approve, and schedule payment within the discount window. Use the late payment interest calculator to quantify what overdue customers owe you, and the cash flow forecast generator to plan around payment timing.

How to use this calculator

1. Enter the invoice date and your standard payment terms (e.g. Net 30, EOM+30, or a custom number of days).
2. The calculator will output the due date and highlight if today is past due.
3. If an early payment discount applies, enter the discount rate and the discount window to see the discounted amount and discount deadline.
4. Use the results for cash flow planning or to communicate due dates clearly on your invoices.

Frequently asked questions

What is the difference between Net 30 and EOM+30?

Net 30 means payment is due exactly 30 days after the invoice date. An invoice dated 5 March is due 4 April. EOM+30 means payment is due 30 days after the last day of the month in which the invoice was issued - so an invoice dated 5 March is due 30 April (30 days after 31 March). EOM+30 is common in manufacturing and wholesale in Australia. If your supplier uses EOM+30 and you calculate it as Net 30, you may be paying nearly a month early.

How do I calculate the value of an early payment discount?

The annualised cost of forgoing an early payment discount is approximately: (Discount % ÷ (1 − Discount %)) × (365 ÷ Days between discount and due date). For 2/10 Net 30, that is roughly (0.02 ÷ 0.98) × (365 ÷ 20) = 37.2% per annum. Unless your cost of capital or investment return exceeds 37%, taking the discount is almost always the right financial decision.

Can I negotiate payment terms with large customers?

Yes - and it is worth attempting, particularly with repeat customers. Government buyers in Australia are encouraged to pay small businesses within 20 days under Commonwealth procurement rules. Some large corporates have voluntarily committed to 30-day terms as part of supplier payment codes. If you cannot negotiate shorter terms, consider offering an early payment discount to incentivise faster payment from customers who have the cash available.