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A 12,000 invoice on net 30
The invoice is 12,000. The terms are 30 days, and the year count is 360, which is the count in 5 CFR 1315.10(a)(9). The rate is 4.75 percent, the Prompt Payment interest rate the Fiscal Service lists for July 1 through December 31, 2026. That rate penalizes a late federal payment. Here it prices the 30 days before the due date.
Invoice amount: 25% lower
Change invoice amount to 9,000 while keeping the other example values the same.
Invoice amount: 25% higher
Change invoice amount to 15,000 while keeping the other example values the same.
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Quick answer
What does the Payment terms float calculate?
What does waiting on this invoice cost for the days in the terms? This calculator uses invoice amount, days in the terms, annual rate, and days in the year to estimate what the wait on one invoice costs immediately in your browser.
With the values currently entered, the result is $47.50 — cost of the days in the terms. It also shows cash held, days in the terms, and dollar-days.
How to use the Payment terms float
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Invoice amount
- Days in the terms — entered in days
- Annual rate — entered in %
- Days in the year — entered in days
Payment terms float formula
Cost of the wait = invoice × (annual rate ÷ days in the year) × days in the terms. Cash held is the invoice.
Assumptions
- 5 CFR 1315.4(g) says that when the contract does not set a date, a discount is not taken, and accelerated payment is not used, payment is due 30 days after the payment period starts. The 30 in the days box is that default. A contract with its own date uses the days you type instead.
- 5 CFR 1315.17(b) writes simple daily interest as invoice × (rate ÷ 360) × days. Section 1315.10(a)(9) uses a 360-day year. The regulation’s worked example is a 1,500 invoice, 10 days after the due date, at 6.5 percent, which is 2.71. This page runs that formula on the term days you type, so it prices the wait before the due date. The Fiscal Service lists 4.75 percent as the Prompt Payment interest rate for July 1 through December 31, 2026. That rate is a late-payment penalty. Type another rate when you want your own cost of funds.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
When the contract does not set a date, a discount is not taken, and accelerated payment is not used, payment is due 30 days after the payment period starts. A contract date replaces that 30.
Simple daily interest formulaCode of Federal Regulations — 5 CFR 1315.17Scope: US federal late-payment interest; the formula is the one used hereWrites simple daily interest as P(r/360×d). The worked example is a $1,500 invoice, 10 days, and a 6.5% rate, which equals $2.71. Section 1315.10(a)(9) bases the calculation on a 360-day year. The regulation applies the formula to days after the due date. This page applies it to the term days you type.
Current Prompt Payment interest rateBureau of the Fiscal ServiceScope: US federal late-payment interest, July 1 through December 31, 2026Lists the Prompt Payment interest rate for July 1 through December 31, 2026 as 4.75%. That rate is the penalty for a late federal payment. Replace it when the Fiscal Service posts the next rate, or type a different cost of funds.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Payment terms float example and edge cases
Payment terms float is the cash an invoice holds until the due date, and what that wait costs. 5 CFR 1315.4 gives a federal invoice 30 days when the contract is silent. The cost line uses the simple daily interest formula in 5 CFR 1315.17.
Example: A 12,000 invoice on net 30
The invoice is 12,000. The terms are 30 days, and the year count is 360, which is the count in 5 CFR 1315.10(a)(9). The rate is 4.75 percent, the Prompt Payment interest rate the Fiscal Service lists for July 1 through December 31, 2026. That rate penalizes a late federal payment. Here it prices the 30 days before the due date.
- Invoice amount
- 12,000
- Days in the terms
- 30 days
- Annual rate
- 4.75 %
- Days in the year
- 360 days
Calculated result$47.50cost of the days in the terms
The invoice holds 12,000 for 30 days, which is 360,000 dollar-days. At 4.75 percent on a 360-day year, the wait costs 47.50. The regulation’s 1,500 invoice, 10 days late at 6.5 percent, is 2.71 on the same formula.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the 47.50 first. It is 12,000 times 4.75 percent, divided by 360, times 30. The cash held is still the full 12,000. The 47.50 is the price of waiting.
- Days sales outstanding divides the whole receivables book by credit sales. This page uses one invoice and the days in its terms. A 45-day contract uses 45 in the days box, and the 30-day rule in 1315.4 no longer sets the date.
Edge cases worth checking
The days count is past the due date
The regulation’s 2.71 example is 10 days after the due date. If you type 10 here, the formula prices those 10 days and leaves the original net 30 out. Add the term days and the late days when you want both waits in one figure.
The note uses a 365-day year
Federal prompt-payment interest uses 360. A commercial note that uses 365 needs 365 in the year box. On this 12,000 invoice, 30 days, and 4.75 percent, a 365-day year costs 46.85 instead of 47.50.
What changes the result most
Invoice amount
Use a current amount for invoice amount. Include fees or recurring costs that belong in the same figure.
Days in the terms
Keep days in the terms on the same time basis as the other inputs. Monthly and annual values are easy to mix up.
Annual rate
Test a lower and higher annual rate. A small percentage change can move the final result more than expected.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Invoice amount: 25% lower
9,000$35.63cost of the days in the terms
Invoice amount: 25% higher
15,000$59.38cost of the days in the terms
Days in the terms: 25% higher
38 days$60.17cost of the days in the terms
Common mistakes
Check invoice amount
5 CFR 1315.4(g) says that when the contract does not set a date, a discount is not taken, and accelerated payment is not used, payment is due 30 days after the payment period starts. The 30 in the days box is that default. A contract with its own date uses the days you type instead. Make sure this matches the number you enter.
Keep days in the year consistent
5 CFR 1315.17(b) writes simple daily interest as invoice × (rate ÷ 360) × days. Section 1315.10(a)(9) uses a 360-day year. The regulation’s worked example is a 1,500 invoice, 10 days after the due date, at 6.5 percent, which is 2.71. This page runs that formula on the term days you type, so it prices the wait before the due date. The Fiscal Service lists 4.75 percent as the Prompt Payment interest rate for July 1 through December 31, 2026. That rate is a late-payment penalty. Type another rate when you want your own cost of funds. Use the same units and time period throughout the calculation.
Do not rely on one payment terms float scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What does waiting on this invoice cost for the days in the terms?
It does not replace a quote, contract, accountant, or local employment guidance.