What does '3/60, n/90' indicate in invoicing terms?

What does '3/60, n/90' indicate in invoicing terms?

• A. A 3% discount if paid within 60 days
• B. Net due in 90 days
• C. A 3% service fee if paid within 60 days
• D. A 60-day grace period with 3% late fee

Answer: (A)

Invoicing terms like 3/60, n/90 describe two parts: a discount window and a net due date. The 3/60 means you may take a 3% cash discount if you pay the invoice within 60 days. The n/90 (net 90) means that if you don’t take the discount, the full amount is due by 90 days from the invoice date. So the best way to understand this term is that paying early within 60 days gives a 3% savings, while the total balance is due no later than 90 days if you skip the discount. The other options misinterpret the discount as a fee or misstate the due-date mechanism.

Invoicing terms like 3/60, n/90 describe two parts: a discount window and a net due date. The 3/60 means you may take a 3% cash discount if you pay the invoice within 60 days. The n/90 (net 90) means that if you don’t take the discount, the full amount is due by 90 days from the invoice date. So the best way to understand this term is that paying early within 60 days gives a 3% savings, while the total balance is due no later than 90 days if you skip the discount. The other options misinterpret the discount as a fee or misstate the due-date mechanism.