Blog | Resolve

Net 30/60/90 Terms – Guide for MRO & Industrial Supply Distributors

Written by Resolve Team | Oct 21, 2025 5:16:46 PM

Updated on October 21, 2025

Net payment terms are the lifeblood of B2B commerce, especially in the MRO and industrial supply sector where customers often face unpredictable cash flow tied to equipment failures and urgent repair needs. 

According to 2023 Statista research, 64% of B2B buyers want to purchase using trade credit, making flexible payment options essential for competitive positioning. However, extending Net 30, 60, or 90 terms creates significant cash flow challenges for distributors who must pay their own suppliers while waiting for customer payments. This guide explores how MRO distributors can implement net terms strategically while protecting their working capital through modern solutions like Resolve's B2B net terms platform.

Key Takeaways

  • 64% of B2B buyers want to purchase using trade credit, making net terms essential for competitive positioning
  • MRO distributors face unique challenges with irregular purchasing patterns and emergency orders that benefit from flexible payment terms
  • According to supply chain industry research, late payments represent a substantial portion of monthly invoiced sales for many businesses, highlighting the critical need for robust credit management
  • Net 60 and Net 90 terms materially increase working capital requirements compared to Net 30, scaling roughly in proportion to DSO, demanding careful financial planning
  • Early payment discounts like 2/10 Net 30 represent 36.7% annualized returns for buyers, accelerating cash flow while providing customer savings
  • Modern platforms offer non-recourse financing with up to 90% advance within 24 hours on approved invoices, eliminating much of the cash flow gap while maintaining customer relationships
  • Tiered credit approaches based on payment history and financial stability allow distributors to offer competitive terms while managing risk

What Are Net 30, Net 60, and Net 90 Payment Terms?

Net terms are deferred payment agreements that specify the number of days a customer has to pay after receiving an invoice. 

In B2B transactions, "Net 30" means payment is due within 30 days of the invoice date, "Net 60" allows 60 days, and "Net 90" extends the payment window to 90 days. These terms act as interest-free grace periods before the payment deadline, with the payment period typically beginning from the invoice date and including weekends and holidays in the calculation.

Common Net Terms Variations in Industrial Supply

While Net 30 is the standard across most B2B sectors, the MRO and industrial supply industry often uses more flexible structures based on customer relationships and order characteristics:

  • Net 15: Shorter terms for new customers or higher-risk accounts
  • Net 30: Standard terms for most established business relationships
  • Net 60: Common for larger, financially stable customers or planned maintenance orders
  • Net 90: Typically reserved for major accounts, project-based work, or strategic partnerships
  • 2/10 Net 30: Offers a 2% discount if paid within 10 days, full amount due in 30 days
  • Milestone-based terms: Payment tied to delivery, installation, or performance verification for large projects

The choice between these options depends on multiple factors including industry standards, customer creditworthiness, order size, and your own cash flow capacity.

Net 15 vs. Net 30 vs. Net 60 vs. Net 90: Key Differences

The primary differences between net term structures relate to cash flow impact, risk exposure, and competitive positioning:

Net 15 terms provide the fastest cash conversion but may limit your customer base to only those with exceptional cash flow. These terms are ideal for new customer relationships where you want to establish payment patterns before extending longer terms.

Net 30 terms represent the industry standard, balancing competitive positioning with reasonable cash flow management. With a 30-day window, you maintain a healthier cash flow and lower Days Sales Outstanding (DSO) while still providing customers adequate time to process payments.

Net 60 terms significantly increase your competitive advantage in industries where extended terms are expected, but they double your working capital requirements compared to Net 30. These terms are appropriate for established customers with proven payment histories and strong financial positions.

Why MRO and Industrial Supply Distributors Offer Net Terms

Offering net terms is not just a courtesy—it's a strategic business decision that drives sales growth and customer loyalty in the competitive MRO marketplace. According to industry analysis, businesses offering net terms attract customers who might otherwise go to competitors, using trade credit to gain a competitive advantage over peers who require immediate payment.

How Net Terms Drive Larger, More Frequent Orders

Net terms remove immediate payment barriers, allowing customers to purchase when they otherwise wouldn't have cash available. This is particularly valuable in the MRO sector, where procurement patterns are characterized by:

  • Diverse item categories: Thousands of different maintenance, repair, and operational items
  • Irregular purchasing patterns: Sporadic rather than predictable schedules
  • Decentralized procurement: Department-level rather than centralized buying
  • Emergency purchases: Unplanned equipment failures requiring immediate parts

When customers can defer payment for 30, 60, or 90 days, they're more likely to place larger orders that include preventive maintenance items alongside emergency repairs. This reduces their future ordering costs and ensures they have critical spare parts on hand, while increasing your average order value and customer lifetime value.

Competitive Landscape: Grainger, MSC Industrial Supply, and Payment Flexibility

In the industrial supply space, major players like Grainger and MSC Industrial Supply have established net terms as standard practice. These national distributors offer sophisticated credit programs that include corporate credit accounts, national account agreements, and tiered credit limits based on purchase volume and payment history.

For mid-market MRO distributors, offering competitive net terms is essential to remain viable against these industry giants. Without flexible payment options, smaller distributors risk losing business to larger competitors who can absorb the cash flow impact of extended terms. However, modern fintech solutions now enable smaller distributors to offer Net 60 and Net 90 terms while receiving immediate payment through invoice advancement programs.

Resolve's B2B Net Terms solution integrates payments, credit, and liquidity into a single infrastructure, helping distributors offer 30/60/90-day terms while receiving up to 90% advance within 24 hours, eliminating cash flow delays that traditionally limited smaller competitors.

The Cash Flow Challenge: Offering Net Terms Without Tying Up Capital

While net terms drive sales growth, they create significant working capital challenges. Extending payment from 30 to 90 days materially increases your cash conversion cycle, requiring proportionally larger working capital reserves to maintain operations. This cash flow squeeze is particularly acute for MRO distributors who must pay their own suppliers while waiting for customer payments.

How Net 60 and Net 90 Impact DSO

Days Sales Outstanding (DSO) measures the average number of days it takes to collect payment after a sale. When you offer Net 60 terms instead of Net 30, your theoretical DSO doubles from 30 to 60 days. In practice, since late payments represent a substantial share of monthly invoiced sales for many businesses, your actual DSO may be even higher.

For example, if monthly operating cash outflows are approximately $100,000, extending payment terms from 30 to 90 days could require 1–3 months of additional liquidity ($100,000–$300,000), assuming steady sales.

This exponential increase in capital requirements creates a "growth trap" where increasing sales on net terms depletes cash faster than payments arrive, forcing operational constraints.

Traditional Factoring vs. Modern Invoice Advancement

Historically, MRO distributors had limited options for addressing the cash flow gap created by net terms:

Traditional factoring involves selling receivables to a third party at a discount, typically receiving 80-90% upfront with the remainder (minus fees) when the customer pays. However, traditional factoring often requires notification to customers, potentially damaging relationships, and may include recourse provisions that leave you liable for non-payment.

Modern invoice advancement platforms like Resolve's Better Than Factoring solution offer non-recourse financing with competitive fees and up to 90% advance within 24 hours, eliminating hidden costs and preserving customer relationships with white-label servicing. Unlike traditional factoring, these platforms handle credit assessment, underwriting, and collections while you maintain direct customer relationships.

Credit Risk Management: Evaluating Buyer Creditworthiness

Offering net terms without proper credit evaluation significantly increases exposure to non-payment and bad debt. A comprehensive credit application process is essential for protecting your business while extending competitive payment terms.

Manual Credit Checks vs. AI-Powered Underwriting

Traditional credit checking involves collecting detailed applications with business identification, financial statements, trade references, and banking information, then manually verifying each component. This process can take days or weeks, creating friction in the sales cycle and potentially losing customers to competitors with faster approval processes.

Modern AI-powered underwriting platforms like Resolve's Business Credit Check deliver instant approvals for qualifying credit lines and decisions within 24 hours for larger lines, using proprietary databases and algorithms. These systems evaluate thousands of data points including payment history, financial ratios, industry risk factors, and behavioral signals to generate dynamic credit decisions.

Setting Credit Limits by Customer Segment

Effective credit management involves segmenting customers based on risk profile and relationship value:

Example policy framework:

  • Tier 1 (Low Risk): Established businesses with 24+ months of on-time payment history, strong financials, and significant purchase volume. May qualify for Net 90 terms with higher credit limits.
  • Tier 2 (Medium Risk): Businesses with 12+ months of good payment history (occasional 5-10 day delays acceptable) and stable operations. Typically receive Net 60 terms with moderate credit limits.
  • Tier 3 (Higher Risk): New customers or businesses with limited payment history. Start with Net 15 or Net 30 terms and lower credit limits, with potential for increases based on payment performance.

This tiered approach allows you to offer competitive terms while managing risk exposure across your customer portfolio.

Automating Invoicing, Collections, and Payment Reminders

Manual accounts receivable processes are time-consuming, error-prone, and inefficient. Modern MRO distributors leverage automation to streamline invoicing, collections, and payment processing while maintaining strong customer relationships.

Best Practices for Payment Reminder Timing

Effective payment reminder cadence balances persistence with professionalism:

  • Net 30 terms: Send friendly reminder at day 25 (5 days before due date)
  • Net 60 terms: Send reminder at day 55 (5 days before due date)
  • 5 days past due: Send first collection notice via email and phone call
  • 15 days past due: Send formal collection letter with late fee assessment (typically 1.5% monthly interest, subject to applicable state laws and contract terms
  • 30 days past due: Place account on credit hold pending payment

Self-Service Payment Portals: ACH, Wire, Credit Card, Check

Modern payment portals accept multiple payment methods through a branded interface, improving customer experience while accelerating cash flow. Key features include:

  • ACH payments: Low-cost, electronic bank transfers
  • Credit card processing: Convenient for customers, with fees that may be passed to buyer where permitted by applicable state laws and card network rules (Mastercard Rules)
  • Wire transfers: For large international or domestic payments
  • Check processing: Traditional option with digital deposit capabilities
  • Automated reconciliation: Real-time syncing with accounting systems like QuickBooks

Resolve's Accounts Receivable with AI-Powered Automation uses AI agents to automate workflows, payment reminders, and reconciliation for net terms, COD, and due-upon-receipt invoices, reducing DSO and manual overhead with real-time ERP sync.

Integrating Net Terms Into Your Ecommerce and Accounting Stack

Seamless integration between your ecommerce platform, accounting system, and payment terms solution is essential for operational efficiency and accurate financial reporting.

Embedding Net Terms at Checkout (Shopify, BigCommerce, Magento)

Modern B2B ecommerce platforms support embedded net terms at checkout natively or via third-party integrations and apps, allowing customers to select payment terms during the purchasing process. Checkout extensions enable you to offer Net 30, 60, or BNPL options directly within your existing ecommerce flow, with instant credit decisions and approval.

For MRO distributors using platforms like Shopify B2B, BigCommerce, Magento, or WooCommerce, these integrations eliminate manual order entry and credit checking, accelerating the sales cycle while maintaining credit risk controls.

ERP and Accounting Sync: QuickBooks, NetSuite, Sage Intacct

Automatic synchronization between your payment terms platform and accounting systems ensures accurate financial reporting and eliminates manual data entry errors. Key integration capabilities include:

  • Real-time transaction syncing: All payments, credits, and adjustments automatically recorded
  • Invoice reconciliation: Automatic matching of payments to open invoices
  • Customer account updates: Credit limits, payment history, and aging reports kept current
  • Financial reporting: Accurate DSO, accounts receivable aging, and cash flow forecasting

Resolve's Integrations with Financial Tech Stack plug directly into ecommerce platforms and accounting systems via checkout extensions, flexible APIs, and auto-sync for seamless reconciliation.

Net Terms for Field Sales and Offline Orders

Not all MRO sales happen through ecommerce channels. Field representatives, phone orders, and in-person transactions require flexible net terms solutions that work across all sales channels.

Enabling Credit Approval for Field Reps on Mobile Devices

Field sales representatives need real-time access to customer credit information and approval capabilities. Mobile-enabled credit platforms allow reps to:

  • Check customer credit limits and payment history
  • Submit new credit applications from the field
  • Receive instant credit decisions for new customers
  • Generate quotes with appropriate payment terms

This capability ensures consistent credit policies across all sales channels while empowering field reps to close deals without waiting for office-based credit approval.

Managing Net Terms Across Multiple Warehouse Locations

For multi-location MRO distributors, credit lines must be portable across branches and warehouse locations. Customers should be able to place orders with any location against their total credit limit, with centralized credit management and consistent payment terms.

This approach mirrors the sophisticated credit infrastructure used by national distributors like MSC Industrial Supply, enabling mid-market competitors to offer similar customer experiences while maintaining centralized risk management.

Resolve's B2B Net Terms solution delivers a consistent, high-conversion experience whether customers transact online, offline, through field reps, or via embedded checkout, with real-time underwriting and advance rates up to 90% within 24 hours.

Offering Extended Terms (Net 60, Net 90) Without Sacrificing Cash Flow

Extended payment terms can be a powerful competitive differentiator, but they require careful financial management to avoid cash flow disruptions.

Advance Pay Rates: 50%, 75%, 90%, and 100%

Modern invoice advancement platforms offer risk-based advance rates that balance cash flow needs with credit risk. Illustrative advance rate tiers include:

  • Up to 90% advance: For low-risk customers with excellent payment history and strong financials
  • 75% advance: For established customers with good payment records
  • 50-75% advance: For customers with acceptable risk profiles and moderate payment history
  • 50% advance: For higher-risk customers or those with limited credit history

These tiered advance rates allow you to offer competitive Net 60 and Net 90 terms while maintaining immediate cash flow through upfront payment on approved invoices. Actual rates vary by risk tier and provider terms.

When to Offer Net 90 vs. Net 60

The choice between Net 60 and Net 90 terms depends on several factors:

Offer Net 90 terms when:

  • Customer is a major account with strong financial position
  • Order involves large capital equipment or project-based work
  • Industry standard requires extended terms (construction, professional services)
  • Customer has 24+ months of consistent on-time payment history

Offer Net 60 terms when:

  • Customer is established but not a major account
  • Order size is moderate to large
  • Industry typically uses 60-day terms (manufacturing, industrial operations)
  • Customer has 12+ months of good payment history

Resolve's Net Terms Management platform underwrites buyers in real time and advances up to 90% of invoice value within 24 hours, enabling sellers to offer Net 60 or Net 90 terms while maintaining immediate cash flow.

How Grainger and MSC Industrial Supply Approach Payment Terms

The following represent examples of capabilities commonly offered by national distributors like Grainger and MSC Industrial Supply, who have sophisticated credit programs that serve as benchmarks for the industry.

Grainger's Approach to Business Credit and Net Terms

Grainger offers corporate credit accounts with flexible terms based on customer size, industry, and purchase history. Their program includes:

  • National account agreements with standardized terms across locations
  • Tiered credit limits based on purchase volume and payment history
  • Vendor-managed inventory (VMI) programs with blanket purchase orders
  • Procurement card programs for decentralized buying

MSC Industrial Supply's Multi-Location Credit Infrastructure

MSC Industrial Supply operates a sophisticated multi-location credit system that allows customers to:

  • Place orders with any branch against their total credit limit
  • Access consistent payment terms across all purchasing channels
  • Benefit from centralized credit management with local account support
  • Participate in volume-based discount programs tied to credit terms

These national programs demonstrate the importance of integrated credit, sales, and payment systems for serving large, multi-location customers effectively.

Protecting Your Business from Bad Debt and Late Payments

Despite best efforts, some customers will pay late or default entirely. Robust protection strategies are essential for managing this risk.

Non-Recourse Financing: Shifting Default Risk to a Third Party

Non-recourse financing shifts the majority of default risk to a third party, protecting your business from bad debt losses. With non-recourse arrangements:

  • You receive advance payment on approved invoices
  • The financing provider assumes responsibility for collections
  • Bad debt losses on covered invoices are absorbed by the provider, not your business
  • Customer relationships remain intact with white-label servicing

Resolve's B2B Payments Platform takes on the majority risk of late payments or defaults with non-recourse advance pay, managing credit assessment, underwriting, and collections so distributors can offer terms without bad-debt exposure on covered invoices.

Building a Bad Debt Reserve vs. Outsourcing Collections

Traditional bad debt management involves building reserves (which varies by portfolio; many distributors maintain low single-digit percentage reserves (NACM)) and managing collections internally or through agencies. However, this approach still impacts your bottom line through lost revenue and collection costs.

Modern non-recourse financing can reduce bad debt exposure on covered invoices by transferring risk to specialized providers who can manage collections more efficiently through scale and expertise. Organizations may still maintain reserves for uncovered receivables or exceptions.

Choosing the Right Payment Terms Platform for Your Distribution Business

Selecting the right platform requires evaluating multiple factors to ensure it meets your operational, financial, and customer experience needs.

Evaluating Advance Rates, Fees, and Approval Times

Key evaluation criteria include:

  • Advance rates: Look for platforms offering competitive rates based on risk tier
  • Fee transparency: Understand total costs and how fees vary by risk tier and term length
  • Approval speed: Instant approvals for qualifying credit lines and decisions within 24 hours for competitive advantage
  • Credit line scalability: Ability to increase limits based on performance

White-Label vs. Co-Branded Payment Experiences

White-label solutions maintain your brand throughout the customer experience, while co-branded approaches may mention the financing provider. For MRO distributors focused on relationship-based sales, white-label solutions typically provide better customer experience and brand consistency.

Resolve's Net Terms for Ecommerce integrates into ecommerce and accounting stacks with instant approvals up to $25,000 for qualifying customers, white-label payment portal, and competitive fees, combining BNPL checkout with AR automation.

Frequently Asked Questions

What is the difference between Net 15, Net 30, and Net 60 payment terms?

Net 15, Net 30, and Net 60 refer to the number of days a customer has to pay after receiving an invoice. The choice depends on customer creditworthiness, industry standards, and your cash flow capacity. Shorter terms provide faster cash conversion, while longer terms increase competitive advantage but require more working capital.

How do net payment terms impact cash flow for industrial distributors?

Net payment terms significantly impact cash flow by extending the time between supplier payments and customer receipts. Net 60 terms double your working capital requirements compared to Net 30, while Net 90 terms materially increase them further, scaling roughly in proportion to DSO. Many distributors use invoice advancement platforms to receive immediate payment while maintaining extended terms for customers.

Can I offer Net 90 terms without waiting 90 days to get paid?

Yes, through modern invoice advancement platforms that provide non-recourse financing with up to 90% advance within 24 hours on approved invoices. These platforms pay you immediately while your customer maintains their 90-day payment window. The platform assumes the credit risk and handles collections, allowing you to offer competitive terms without cash flow disruption.

What is non-recourse financing and how does it protect against bad debt?

Non-recourse financing is a payment arrangement where a third party assumes the majority of credit risk for customer non-payment. When you use non-recourse financing, you receive advance payment on approved invoices and are not liable if the customer defaults on covered invoices. The financing provider handles collections and absorbs bad debt losses on approved receivables, protecting your business while allowing you to maintain customer relationships through white-label servicing.

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.