Net 90 payment terms mean a buyer has 90 days from the invoice date to pay in full. In construction supply, Net 90 is one of the most common, and most cash-flow-straining, payment structures a materials supplier will encounter. Construction materials suppliers face significant cash flow challenges in an industry where extended payment cycles are the norm, with many projects running 60 to 90 days or more before payment arrives.
Net 90 means the buyer has 90 days from the invoice date to pay the full amount owed. It is the longest standard payment term in B2B commerce.
Concrete example: you invoice $80,000 of structural steel on August 1. Under Net 90, payment is due October 30. Meanwhile, your own payroll, supplier invoices, and overhead do not wait 90 days.
Yes. Net 90 is standard on large commercial construction projects and government contracts. General contractors and large project owners routinely impose extended terms on their supply chain because their own payment cycles, tied to project draws and owner funding, run long.
That said, Net 90 should not be accepted automatically. For most materials suppliers, Net 90 strains cash flow unless you have net terms financing in place. Before accepting Net 90 from a new customer, run a credit review. A large order on Net 90 from a buyer with a thin credit profile is a significant risk.
| Term | Days to Pay | Common Use Case in Construction | Cash Flow Risk |
|---|---|---|---|
| Net 15 | 15 days | Small orders, new customers | Low |
| Net 30 | 30 days | Standard B2B, established accounts | Moderate |
| Net 60 | 60 days | Mid-size projects, custom orders | High |
| Net 90 | 90 days | Large commercial, government projects | Very High |
The construction industry's project-based nature makes payment terms more complex than simple invoice dating. Key differences:
In construction specifically, payment terms are often tied to project milestones rather than standard invoice dates. This creates additional complexity for materials suppliers who deliver products upfront but wait for project completion or milestone achievement before receiving payment.
Net 90 does not just delay payment. It compounds.
If you are supplying three active job sites simultaneously, each on Net 90, you may have $300,000 or more in outstanding invoices at any given time. Meanwhile, your own suppliers, payroll, and overhead do not wait 90 days. This is the cash flow trap that forces many construction materials suppliers to either turn down new business or take on debt to bridge the gap.
Consider a worked scenario: a supplier ships $120,000 of materials in month one. Payroll runs $40,000 per month. By the time the Net 90 invoice is paid, the supplier has absorbed $120,000 in costs against zero incoming cash from that order. If a second large order ships in month two on the same terms, the gap widens further.
The DSO impact is direct: if your average customer is on Net 90, your days sales outstanding is 90 or higher by definition. That is three months of revenue sitting in AR instead of your bank account.
Invoice financing for construction suppliers eliminates the trap. Resolve advances up to 100% of each invoice within 24 hours, so your cash flow operates on a 1-day cycle regardless of what terms your customers are on. Your customer still pays on Net 90. You get paid now.
See how construction suppliers using Resolve have reduced DSO and scaled order volume without straining working capital.
Accepting Net 90 is not always avoidable, but it is often negotiable. Specific tactics:
Tie payment milestones to project phases. Instead of a single Net 90 invoice at delivery, propose progress billing: 30% on order confirmation, 40% on delivery, 30% at project completion. This converts one 90-day exposure into three shorter ones.
Offer an early payment discount. A 2/10 Net 30 structure (2% discount if paid within 10 days, full amount due in 30) gives cash-rich contractors an incentive to pay faster. Adoption in construction is more limited than in other industries, but it works with buyers who have available capital and want to reduce their payables cost.
Tie volume commitments to shorter terms. Offer preferred pricing or priority fulfillment in exchange for Net 30 or Net 45. Larger customers with leverage often accept this trade when the pricing benefit is meaningful.
When to hold firm vs. when to accept Net 90. If the account is large, the buyer has a strong credit profile, and you have invoice financing in place, Net 90 is manageable. If the buyer is new, the order is custom or non-returnable, or the credit check raises flags, hold firm on shorter terms or require a deposit.
What to put in writing. Any agreed terms should appear in a signed contract or purchase order: exact due date, late fee structure, interest rate on overdue balances, and dispute resolution process. Verbal agreements on payment terms are difficult to enforce.
The construction industry's structure creates unique challenges that make net payment terms not just beneficial but often necessary for competitive survival. Construction companies face more cash flow challenges than almost any other trade, creating a ripple effect throughout the supply chain.
Contractors and construction firms operate with extended payment cycles as standard practice. When suppliers refuse to offer net terms, they immediately disqualify themselves from many bidding opportunities. Companies offering favorable payment terms are often chosen over competitors, particularly when working with large companies that have lengthy payment processes.
Net terms demonstrate flexibility and understanding of client needs, making customers more likely to continue business relationships and recommend services to others. This relationship-building aspect becomes crucial in an industry where word-of-mouth and reputation drive significant business.
The construction industry faces unique challenges including cost overruns, delayed payments, and the need for substantial upfront capital investments in materials and equipment before receiving payment. Many construction companies do not offer early payment discounts, further complicating cash flow management for suppliers.
For materials suppliers, this creates a difficult balancing act: extend credit to win business but risk cash flow strain, or maintain strict payment terms and lose competitive opportunities. The solution is strategic net terms management that protects supplier cash flow while meeting customer needs. Resolve's net terms management platform advances up to 100% of invoice value within 24 hours while your customers retain the 30 to 90-day terms they need.
Implementing net payment terms requires careful planning and systematic processes to minimize risk while maximizing opportunity.
Before extending any credit terms, establish a formal credit application process. At minimum, collect business registration and licensing verification, trade references from other suppliers, bank references, and a business credit report. For smaller businesses, a personal guarantee adds a meaningful layer of protection.
Resolve provides instant business credit decisions with results typically delivered within 24 hours, eliminating weeks of manual verification while providing deeper insights than traditional credit bureaus.
Credit limits should reflect the customer's annual purchase volume potential, payment history with other suppliers, business size and financial stability, and your own risk tolerance. Start conservative with new customers and increase limits based on payment performance. Construction payment terms typically range from Net 30 to pay-when-paid structures, so your terms should align with market expectations while protecting your cash flow.
Effective accounts receivable management is critical when operating with extended payment terms. Manual AR processes become overwhelming at scale.
Essential automation for construction suppliers includes:
Resolve's AI-powered accounts receivable automation platform automates the entire net terms workflow from invoice to payment, reducing days sales outstanding and accelerating cash flow through intelligent payment reminders and collections management.
Strategies to minimize DSO in construction supply:
Extended payment terms increase credit risk. Net 90 in particular requires proactive risk management because the exposure window is long and the dollar amounts in construction are often large.
Key risk mitigation approaches:
Resolve's agentic collections for overdue invoices automates follow-up across email, SMS, and voice calls without requiring manual intervention from your team.
Deposits should be required for:
Technology solutions can significantly streamline payment processes and improve cash flow management.
A comprehensive payment portal should accept:
Resolve's B2B payments platform provides a branded portal accepting ACH, credit card, wire, or check with QuickBooks auto-bookkeeping, ensuring all transactions are automatically recorded and reconciled.
Essential integration capabilities include automatic invoice creation and synchronization, real-time payment recording and reconciliation, customer credit limit tracking and alerts, and financial reporting for cash flow forecasting.
Strategic use of net terms drives significant business growth when implemented with the right infrastructure behind it.
Net terms enable customers to purchase more than they could with immediate payment requirements. Businesses offering net terms win more business than those requiring upfront payment because they can serve clients with cash flow constraints, using trade credit as a competitive advantage.
Net terms open opportunities with large commercial contractors on extended payment cycles, government and institutional projects requiring specific terms, new businesses building their credit and cash flow, seasonal businesses with cyclical revenue patterns, and growth-stage companies with strong potential but limited working capital.
Resolve's net terms for ecommerce solution provides buy now pay later options that can increase sales volume and customer retention with instant approvals, enabling suppliers to safely extend credit to more customers online and offline.
Proper legal structure protects both suppliers and customers in net terms arrangements.
Essential elements for enforceable payment terms:
Construction payment terms are subject to various state regulations:
Net 90 means the buyer has 90 days from the invoice date to pay the full amount owed. It is the longest standard payment term in B2B commerce and is common in construction supply for large commercial and government projects.
Yes. Net 90 is standard on large commercial construction projects and government contracts. For materials suppliers, it creates significant cash flow pressure because you deliver materials upfront but wait 90 days for payment.
Add 90 calendar days to the invoice date. If you invoice on August 1, payment is due October 30. Check your contract terms to confirm whether weekends or holidays affect the due date, as some agreements specify business days rather than calendar days.
Net 90 sets a fixed deadline: payment is due 90 days from the invoice date regardless of when the general contractor gets paid. Pay-when-paid ties your payment to when the GC receives funds from the project owner, which can push your payment well beyond 90 days. Enforceability of pay-when-paid clauses varies by state.
Net 30, Net 60, and Net 90 refer to the number of days a buyer has to pay after the invoice date. Net 30 is standard for smaller B2B orders; Net 60 is common for mid-size projects; Net 90 is used on large commercial or government construction projects. In construction specifically, payment terms are often tied to project milestones rather than a fixed invoice date, which can push effective payment timelines even longer.
Yes, in most cases, provided your contract or terms of sale specify the interest rate and it complies with your state's maximum allowable rate. Document the rate clearly in writing before extending credit. Consistent enforcement of late fees and interest charges significantly improves payment behavior over time.
Follow a systematic collections process: reminder communications, formal demand letters, late fee application, and potentially legal action or mechanic's lien filing. Resolve's agentic collections for overdue invoices automates this sequence across email, SMS, and voice without manual effort from your team.
The most effective approach is invoice financing. Resolve advances up to 100% of each approved invoice within 24 hours on a non-recourse basis, meaning if an approved buyer defaults, you keep the advance. Your customer pays on Net 90. Your cash flow operates on a 1-day cycle. Resolve's non-recourse financing alternative to factoring eliminates the cash flow gap without adding debt or dilution.
Conduct credit assessments including business credit checks, trade references, bank references, financial statements, and verification of licenses and insurance. Resolve provides business credit checks with results typically within 24 hours, giving your sales team fast answers without manual research.
Yes, through proper risk management: start with shorter terms (Net 15 or Net 30), require deposits for large orders, set conservative credit limits, and use non-recourse financing that advances payment upfront while assuming credit risk. Resolve's platform is used by suppliers of all sizes, not just enterprise distributors.
This post is to be used for informational purposes only and does not constitute formal legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Resolve assumes no liability for actions taken in reliance upon the information contained herein.