What is 4 percent 25th prox net 60?

Answer 1

These are accounts receivable and Accounts Payable terms. "4% 25th prox" means that the payer of this invoice will be granted a 4% discount (usually excluding freight costs) if the bill is paid by the 25th of the next month.

"Net 60" means that the full invoice is due 60 days after the invoice date.

On a Receivables side, it is important to save envelopes of incoming payments which have NOT met the discount deadline, to document when a payment was mailed.

Part of the Payables/Receivables cat-and-mouse game is for a customer (the payer) to PRINT a check in time to deduct the discount - but not MAIL it until the customer has funds to cover it.

The vendor (seller who is owed the money) has offered the discount if paid according to the terms, and if the payer does not honor the terms, the payer forfeits the discount.

In a dispute, the remittance envelope proves the payment date. In reality, if the payer usually pays timely and is otherwise a good customer, the vendor will grant the discount. It's all negotiable.