"Net 60" is a payment term used in business transactions that indicates the buyer must pay the seller within 60 days of receiving an invoice. This term is often used in credit agreements, allowing customers time to manage their cash flow before settling their debts. Businesses may offer net 60 terms to encourage sales, especially to larger clients who may need more time to process payments. However, sellers must consider the potential impact on their cash flow, as waiting 60 days for payment can affect their ability to meet financial obligations.