Net 30/60/90 Terms – Guide for Industrial Equipment Suppliers

Industrial equipment suppliers face a unique challenge: customers need high-cost machinery to deliver projects, but lack upfront cash to buy it, which is why financing or leasing is common.

Net payment terms provide the solution—allowing buyers to defer payment while suppliers maintain cash flow. With 85% of B2B buyers preferring to purchase on credit rather than pay immediately, offering net terms has become essential for competitive industrial suppliers. However, managing these extended payment cycles requires strategic planning to avoid cash flow strain. 

Resolve's B2B Net Terms platform helps industrial equipment suppliers offer flexible payment options while getting paid upfront, eliminating the traditional trade-off between sales growth and cash flow stability.

Key Takeaways

• Net 30/60/90 terms are standard deferred payment agreements that allow customers to pay 30, 60, or 90 days after invoice receipt
• Construction firms wait extended periods to get paid [Citation needed: recent construction payments study], making Net 90 terms particularly relevant for industrial equipment suppliers in this sector
• A significant portion of B2B invoiced sales in the US are overdue [Citation needed: current B2B payments study], highlighting the importance of robust credit assessment and collections processes
• Industrial equipment suppliers can increase sales and customer loyalty by offering flexible payment terms while protecting cash flow through solutions like Resolve's advance payment model
• Many SMBs report being negatively impacted by extended payment terms, making risk management essential when offering net terms

What Are Net 30 Terms and How Do They Work for Industrial Suppliers

Net terms represent a fundamental agreement in B2B commerce where payment is due a specific number of days after the invoice date. Net 30 means payment is due within 30 days, Net 60 allows 60 days, and Net 90 provides a 90-day payment window. 

For industrial equipment suppliers, these terms function as trade credit that enables customers—often contractors, manufacturers, or construction firms—to purchase necessary equipment without immediate capital outlay.

The mechanics are straightforward: when you deliver equipment or components, you issue an invoice with clearly stated payment terms (e.g., "Net 30"). The payment due date is calculated from the invoice date, not the delivery date, unless otherwise specified in your contract. During this grace period, your customer can deploy the equipment to generate revenue before settling their obligation to you.

Net 30 vs Net 60 vs Net 90 Differences

The choice between Net 30, 60, or 90 terms depends on several factors specific to industrial equipment sales:

• Net 30: Standard for smaller equipment purchases, replacement parts, or established customers with proven payment history
• Net 60: Common for mid-sized equipment orders or when customers need time to complete project phases before receiving their own payments
• Net 90: Prevalent in construction and heavy manufacturing sectors where project cycles are longer; aligns with the fact that construction firms wait 94 days on average to get paid

According to industry data, 31% of companies across manufacturing and service sectors use 45-day payment terms, while 30% use 30-day terms and 27% use 60-day terms. However, the industrial equipment sector often requires longer terms due to the capital-intensive nature of purchases and project-based revenue cycles.

Common Payment Terms Examples for Industrial Equipment Businesses

Industrial equipment suppliers employ various payment structures beyond standard net terms to accommodate different transaction types and customer needs:

• 2/10 net 30: Offers a 2% discount for payment within 10 days, with full payment due in 30 days
• COD (Cash on Delivery): Payment required upon equipment delivery, common for new customers or high-risk transactions
• Due upon receipt: Immediate payment expected when invoice is received
• Milestone billing: Payment tied to specific project completion points, common for custom equipment installations
• Progress payments: Scheduled payments throughout a long-term equipment implementation project
• Retainage: Holding back a percentage (typically 5-10%) until final project acceptance

For industrial suppliers dealing with large equipment orders, partial payment options can significantly improve cash flow. Companies offering partial payment options see 20% faster invoice settlement time compared to traditional full-payment methods.

The choice between COD and net terms often depends on customer relationship stage and risk assessment. While COD eliminates payment risk, it may limit sales opportunities with creditworthy customers who prefer payment flexibility. 

As one financial expert notes, "The best invoice payment terms are the ones that provide enough cash to keep your business running while carefully considering your clients' needs."

How to Calculate Net 30 Days Payment Schedules

Calculating accurate payment due dates is essential for effective accounts receivable management. The standard method counts calendar days from the invoice date:

• Invoice dated January 15 with Net 30 terms: Payment due February 14
• Invoice dated January 15 with Net 60 terms: Payment due March 15
• Invoice dated January 15 with Net 90 terms: Payment due April 15

Some businesses specify "business days only," which excludes weekends and holidays, but this should be explicitly stated on the invoice. Most industrial equipment suppliers use calendar days for simplicity.

Tracking Payment Deadlines

Effective payment tracking requires systematic monitoring through:

• Aging reports: Categorizing receivables by days past due (0-30, 31-60, 61-90, 90+)
• DSO (Days Sales Outstanding) calculation: Measuring average collection period across all invoices
• Automated payment reminders: Scheduled communications before and after due dates
• Remittance processing systems: Efficient handling of received payments

Construction companies' days sales outstanding ranges from 51 to 83 days on average, indicating that even with Net 30 terms, actual payment often occurs much later. This reality underscores the importance of proactive payment tracking and collections management.

Resolve's AI-powered accounts receivable automation platform streamlines this entire process by automating payment reminders, collections workflows, and reconciliation, reducing DSO while maintaining customer relationships.

Benefits of Offering Trade Credit to Industrial Equipment Buyers

Offering net terms provides significant strategic advantages for industrial equipment suppliers:

• Increased sales volume: Customers can purchase equipment they otherwise couldn't afford immediately
• Competitive differentiation: In markets where competitors require immediate payment, net terms create a compelling advantage
• Customer loyalty: Payment flexibility builds stronger relationships and encourages repeat business
• Larger order values: Customers often increase order size when payment terms are available
• Market expansion: Access to customers with strong business fundamentals but temporary cash flow constraints

The impact is substantial—businesses that offer net terms are generally able to drive more sales than those that don't because they can sell to clients with cash flow problems, effectively using trade credit to gain competitive advantage.

For industrial equipment suppliers specifically, net terms align with customer business cycles. Construction and manufacturing firms often operate on project-based revenue models where they receive payment only after completing work or delivering products. By offering Net 60 or Net 90 terms, suppliers enable these customers to purchase necessary equipment at the start of projects.

Resolve's B2B Net Terms solution enhances these benefits by advancing up to 100% of invoice value within 24 hours, allowing suppliers to offer flexible terms while maintaining immediate cash flow.

Setting Up Invoice Payment Systems for Industrial Supply Companies

A robust payment infrastructure is essential for managing net terms effectively. Industrial equipment suppliers should implement systems that accommodate multiple payment methods while streamlining reconciliation:

• ACH transfers: Cost-effective electronic payments with lower fees than credit cards
• Wire transfers: Secure for large equipment purchases, though with higher processing fees
• Credit card processing: Convenient for customers but with higher merchant fees (often passed to buyers)
• Check processing: Still common in industrial sectors, though slower and more manual

A modern payment portal should provide customers with a branded, self-service experience that accepts all major payment methods while automatically reconciling payments to invoices. As payment experts note, "When defining acceptable methods in your payment terms, make it as convenient as possible for your clients... letting clients pay their preferred way gets you paid faster."

Resolve's B2B Payments Platform provides industrial suppliers with a white-label payment portal that accepts ACH, credit card, wire, or check payments, with automatic reconciliation and QuickBooks integration to eliminate manual bookkeeping.

Using Invoice Templates for Net Terms Transactions

Professional invoice templates are crucial for clear communication of payment terms and expectations. Essential components for industrial equipment invoices include:

• Clear payment terms: "Net 30," "Net 60," or "Net 90" prominently displayed
• Invoice date and number: For accurate payment timing and record-keeping
• Detailed line items: Equipment descriptions, serial numbers, and specifications
• Shipping and delivery details: To clarify when the payment clock starts
• Payment instructions: Clear directions for all accepted payment methods
• Late payment policies: Consequences of missing payment deadlines
• Early payment discounts: If offered (e.g., "2% discount if paid within 10 days")

Customizing templates for equipment sales might include warranty information, installation requirements, or maintenance schedules—details that add value while reinforcing the professional relationship.

Trade Credit Insurance Options for Equipment Suppliers

Managing credit risk is paramount when offering extended payment terms. Industrial equipment suppliers face significant exposure, as 60% of construction material invoices are paid late, with small businesses waiting an average of 14 days beyond agreed terms.

Trade credit insurance and non-recourse financing options provide protection against customer defaults:

• Traditional trade credit insurance: Covers a percentage of losses from customer insolvency
• Non-recourse invoice factoring: Third party assumes full credit risk in exchange for a fee
• Integrated credit platforms: Combine insurance-like protection with payment processing

Resolve's non-recourse financing model functions as modern trade credit insurance by advancing payment upfront while assuming the majority of credit risk. All cash advances are non-recourse, meaning what you receive is always yours to keep, regardless of whether your customer ultimately pays.

This approach is particularly valuable for industrial suppliers dealing with smaller contractors or new customers where credit history may be limited or difficult to assess.

Finding Reliable Industrial Equipment Suppliers Near You

While this guide focuses on suppliers offering net terms, industrial businesses also need reliable suppliers who can provide equipment when needed. When evaluating potential suppliers, consider:

• Credit verification capabilities: Suppliers who thoroughly vet their own customers demonstrate financial responsibility
• Payment history: Suppliers with consistent, timely payments to their vendors likely manage cash flow effectively
• Business references: Trade references from other suppliers indicate reliability and creditworthiness
• Credit reporting: Suppliers who monitor their own credit profile show financial awareness

For industrial equipment buyers seeking suppliers with flexible payment options, Resolve's Business Credit Check service can help verify supplier reliability. This free service delivers instant, data-rich credit decisions using only a business name and address, helping you identify suppliers with strong financial standing.

Managing Global Industrial Equipment Transactions with Net Terms

International industrial equipment transactions add complexity to net terms management:

• Currency exchange risks: Fluctuations between invoice date and payment date can impact actual revenue
• Cross-border payment delays: International wire transfers often take longer than domestic payments
• Compliance requirements: Different countries have varying regulations for commercial credit
• Documentation complexity: Export documentation, letters of credit, and customs paperwork add layers of complexity

For global transactions, consider shorter net terms (Net 15 or Net 30) to minimize currency and payment timing risks. Alternatively, use forward contracts to lock in exchange rates for larger equipment orders.

Automating Net Terms Management for Industrial Suppliers

Manual net terms management becomes unsustainable as sales volume grows. Automation provides significant benefits:

• Workflow automation: Systematic credit checks, approval processes, and payment reminders
• ERP integration: Seamless connection with existing accounting and inventory systems
• Real-time reporting: Dashboards showing aging receivables, credit exposure, and cash flow projections
• Collection automation: Escalating reminder sequences that maintain customer relationships while ensuring payment

Resolve's Net Terms Management platform automates the time-consuming tasks of payment reminders, servicing, and collections while syncing with QuickBooks for seamless financial reporting. This automation reduces administrative overhead while improving cash flow through systematic collections processes.

With 55% of all B2B invoiced sales in the US overdue, systematic automation isn't just convenient—it's essential for maintaining healthy cash flow in industrial equipment supply businesses.

Frequently Asked Questions

What's the difference between net 30 and 2/10 net 30 payment terms?

Net 30 means the full invoice amount is due within 30 days of the invoice date. 2/10 net 30 offers a 2% discount if the customer pays within 10 days, with the full amount due in 30 days if they don't take the discount. This structure incentivizes early payment while providing a longer payment window as a backup option.

How do I calculate the exact due date for net 30 terms?

The due date is calculated as 30 calendar days from the invoice date, unless your terms specifically state "business days only." For example, an invoice dated March 15 with Net 30 terms would be due April 14. Always clarify your calculation method in your terms and conditions to avoid disputes.

Should industrial equipment suppliers offer net 60 or net 90 terms?

Industrial equipment suppliers should offer longer terms (Net 60 or Net 90) when dealing with construction, manufacturing, or project-based customers who have extended revenue cycles. Since construction firms wait 94 days on average to get paid, Net 90 terms align with their actual cash flow patterns. However, always assess customer creditworthiness before extending longer terms.

What happens if a customer doesn't pay within net 30 terms?

When customers don't pay within agreed terms, standard practice includes sending payment reminders, applying late fees (if specified in your terms), and potentially escalating to collections. Around 60% of construction material invoices are paid late, so having a systematic approach to late payments is essential. Consider using non-recourse financing options that protect your cash flow regardless of customer payment timing.

Can I use a net 30 calculator for international transactions?

While net 30 calculators work for date calculations in international transactions, they don't account for currency exchange risks, international payment processing delays, or compliance requirements. For international deals, consider shorter terms or currency hedging strategies to manage these additional complexities.

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.