Credit terms refer to the payment conditions that are agreed upon between a buyer and seller. Essentially, it outlines the time period in which the buyer has to pay for goods or services. For example, if a vendor offers credit terms of net 30, it means the buyer has 30 days to pay for the purchase. Credit terms can also specify if any discounts, such as early payment discounts, will be offered. By having a clear understanding of credit terms, both buyers and sellers can operate confidently and avoid any confusion or disputes down the line.
