Definition:
When considering accounts receivables credit policy, the credit period is the time period in which a credit customer has to pay their bill. If a company offers credit terms of 2/10, net 30, for example, the "net 30" portion of the equation means that if the credit customer does not take the 2% discount offered, then the bill must be paid in 30 days.
Examples:
XYZ, Inc. offers credit terms to its customers of 2/10, net 30. If its credit customers do not take the 2% discount offered, then they must pay their bills in 30 days.
