Net 30/60/90 Terms – Guide for HVAC/R Suppliers

Updated on October 21, 2025

Extended payment terms have become standard practice in the HVAC/R industry, with Net 30 serving as the baseline expectation and Net 60-90 increasingly common with large enterprise buyers; U.S. federal contracts are generally subject to Prompt Payment rules targeting Net 30 for large commercial projects. 

For suppliers navigating this landscape, offering competitive terms is essential for winning business—but managing the resulting cash flow gap requires strategic solutions. Modern platforms like Resolve's B2B net terms solutions help HVAC suppliers extend attractive credit terms while getting paid upfront, transforming what was once a financial burden into a competitive advantage.

Key Takeaways

• Net 30 is industry standard for HVAC/R suppliers, but Net 60-90 terms are increasingly common with large enterprise buyers
• Approximately 60% of invoices in the United States are paid late, creating unpredictable cash flow that can threaten business operations
• HVAC contractors can experience cash flow gaps of several weeks under Net 30 terms, depending on billing cycles and project timing
• Early payment discounts like 2/10 Net 30 can materially improve cash flow; impact depends on adoption rates and customer mix
• Free business credit checks requiring only company name and address can prevent bad debt before it occurs.
• Non-recourse invoice financing allows suppliers to offer Net 60-90 terms while receiving up to 100% of invoice value on eligible invoices (net of fees); non-recourse typically covers buyer credit risk, not disputes or fraud
• Automated AR platforms reduce manual collection work by handling payment reminders and reconciliation across multiple payment methods

What Are Net Payment Terms? (Net 15, 30, 60, 90 Explained)

Net payment terms specify the number of calendar days a customer has to pay an invoice in full from the invoice date. The term "net" refers to the total amount owed before any discounts, while the number indicates the payment window. Net 15 allows 15 days for payment, Net 30 provides 30 days, and so on up to Net 90 for the most extended terms.

In the HVAC/R industry specifically, payment terms typically range from Net 15 to Net 90 days, with Net 30 being the most common standard. According to industry research, HVAC contractors often work with payment terms of Net 30 or payment upon project completion. 

The construction and HVAC sectors frequently utilize Net 30 terms or pay-when-paid (or pay-if-paid, depending on jurisdiction) arrangements, where subcontractor payments depend on the general contractor receiving payment from the project owner.

Net 15 vs. Net 30: Which Terms HVAC Suppliers Should Offer

For new customers or smaller residential jobs, Net 15 terms provide faster cash conversion while still offering some flexibility. Net 15 is particularly appropriate for:

• New contractor relationships requiring credit establishment
• Smaller equipment orders under $5,000
• Service parts and emergency replacement components
• Customers with limited credit history

Net 30 remains the industry standard for established relationships and typical equipment orders. This balance provides contractors sufficient time to invoice their end customers while maintaining reasonable cash flow for suppliers.

Understanding Net 60 and Net 90 for Large Commercial Orders

Extended terms of Net 60 and Net 90 are becoming increasingly common for transactions involving large corporate buyers with established payment processes that require multiple approvals. In the construction industry, payment terms typically range from Net 30 to Net 90 days, with payment often tied to project milestones or completion.

For HVAC/R suppliers, these longer terms essentially function as interest-free loans from seller to buyer, providing customers with improved cash flow at the expense of the supplier's immediate liquidity. The trade-off involves balancing customer attraction and retention against the supplier's own operational cash needs and working capital requirements.

Why HVAC Suppliers Offer Trade Credit to Contractors and Distributors

Offering trade credit isn't just about meeting customer expectations—it's a strategic business decision that directly impacts sales volume and market competitiveness. Extended payment terms attract and retain larger commercial customers who require time to process invoices through corporate payment systems, expanding market reach for HVAC/R suppliers.

Research shows that companies often choose vendors specifically based on payment terms offered, with many large organizations only processing vendor payments weekly, biweekly, or monthly. Offering Net 30 or longer terms can be the deciding factor in winning contracts versus competitors with stricter payment requirements.

How Trade Credit Increases Average Order Value for HVAC Equipment

When contractors have access to extended payment terms, they can purchase larger equipment packages and complete more comprehensive system installations. This directly increases average order value for suppliers while enabling contractors to deliver better solutions to their end customers.

Trade credit benefits include:

• Increased purchasing power for contractors managing multiple projects simultaneously
• Enhanced customer loyalty through flexible financial partnerships
• Competitive differentiation in crowded HVAC supply markets
• Larger, more profitable orders that justify sales and support resources

Competitive Pressure: Why Local HVAC Suppliers Extend Terms

The pressure to offer competitive payment terms is particularly intense among local HVAC suppliers competing for the same contractor relationships. Payment flexibility is increasingly important when choosing vendors in B2B relationships.

Suppliers who cannot offer standard Net 30 terms often find themselves excluded from bid lists or forced to compete solely on price, eroding margins and profitability. Suppliers and vendors are often willing to negotiate payment terms, particularly for customers who can generate significant business volume.

Cash Flow Risks of Offering Net 30–90 Terms (and How to Mitigate Them)

While extended payment terms drive sales, they create significant financial challenges for HVAC/R suppliers. The fundamental issue is the cash flow gap between when suppliers must pay their own vendors and employees versus when they receive payment from customers.

HVAC contractors can experience cash flow gaps of several weeks under Net 30 terms, depending on billing cycles and project timing. This gap widens dramatically with Net 60-90 terms, potentially creating liquidity shortfalls that can threaten business viability without proper management.

How Delayed Payments Impact HVAC Supplier Working Capital

The impact of delayed payments is compounded by the fact that, according to the Atradius Payment Practices Barometer Americas, roughly half or more of U.S. B2B invoices are paid late. For suppliers operating on thin margins, these delays can create cascading payment problems with their own vendors.

Working capital strain manifests in several ways:

• Inability to purchase inventory for new orders
• Delayed payments to equipment manufacturers
• Reduced capacity to invest in business growth
• Increased reliance on expensive short-term financing

Strategies to Reduce DSO for Wholesale HVAC Suppliers

Days Sales Outstanding (DSO) measures the average time it takes to collect payment after a sale. Lower DSO indicates better cash flow management and financial health. Effective strategies to reduce DSO include:

• Implementing early payment discounts (such as 2/10 Net 30) to incentivize faster payment
• Conducting thorough credit checks before extending terms to new customers
• Automating payment reminders to ensure consistent follow-up
• Offering multiple payment methods including ACH, credit card, and wire transfers
• Using invoice financing to receive immediate payment while maintaining customer terms

Per Resolve's product documentation, free business credit checks help mitigate risk by delivering instant, data-rich credit decisions requiring only the customer's business name and address, with results typically available within 24 hours.

Smart Credit Checks for HVAC Contractors: Approve Customers Faster

Traditional credit assessment processes can take days or weeks, creating friction in fast-moving HVAC equipment sales. Modern AI-powered credit checks dramatically accelerate this process while providing deeper insights than traditional bureaus.

Resolve's experts—formerly of Amazon, PayPal, and Fortune 500 firms—deliver credit insights that combine AI, behavioral signals, and human expertise to eliminate friction across the credit lifecycle. This approach requires only your customer's business name and address, delivering results within 24 business hours.

What Data HVAC Suppliers Should Review Before Approving Net Terms

Effective credit assessment goes beyond basic credit scores to evaluate multiple dimensions of creditworthiness:

• Payment history with other suppliers in the HVAC and construction sectors
• Business longevity and stability indicators
• Financial database signals from proprietary sources
• Industry-specific risk factors for HVAC contractors
• Geographic and market concentration risks

Quiet pre-approval checks allow suppliers to assess creditworthiness without customer interaction, enabling seamless checkout experiences for qualified buyers.

Instant vs. Manual Credit Decisions: Time and Risk Trade-Offs

The choice between instant and manual credit decisions involves balancing speed against thoroughness. Per Resolve's product documentation, some purchases up to $25,000 may qualify for instant approvals, providing the speed contractors need for same-day equipment requirements. For larger orders or higher-risk customers, more detailed manual reviews may be warranted.

However, manual processes create significant delays that can cost sales. According to industry research, the average HVAC contractor needs equipment immediately to complete installations, making instant credit decisions a critical competitive advantage.

How Wholesale HVAC Suppliers Use Advance Payment to Unlock Cash Flow

Invoice financing has evolved dramatically from traditional factoring, with modern non-recourse solutions providing better terms and lower risk for HVAC suppliers. Rather than waiting 30-90 days for customer payment, suppliers can receive immediate advance payment on approved invoices.

Per Resolve's product documentation, Resolve advances up to 90% of invoice value within 24 hours, allowing suppliers to offer extended net terms without delaying cash flow. For higher-risk customers, advance rates may be 75% or 50%. Non-recourse typically covers buyer credit/default risk; coverage does not extend to disputes, fraud, or contractual issues—see program terms.

Non-Recourse Invoice Financing vs. Traditional Factoring for HVAC Suppliers

Traditional factoring arrangements often involve recourse provisions that leave suppliers liable for customer non-payment, creating significant financial risk. Non-recourse financing transfers buyer credit risk to the financing partner, providing greater peace of mind.

Key differences include:

• Risk transfer: Non-recourse financing eliminates supplier liability for customer credit defaults
• Fee transparency: Flat fees versus complex factoring fee structures (fees may vary by risk and agreement—refer to current pricing)
• Customer relationships: White-label solutions maintain supplier branding and relationships
• Approval speed: Real-time underwriting versus days-long factoring approval processes

How to Receive Up to 100% Upfront on Net 60 Invoices

Resolve's modern alternative to factoring offers competitive fees on 30-day net terms (fees may vary by risk and agreement—refer to current pricing). For Net 60 invoices, similar advance structures apply, allowing suppliers to receive up to 100% of the invoice face value on eligible invoices (net of fees) while customers maintain their required 60-day payment window.

This approach transforms the economics of extended payment terms, converting what was once a cash flow liability into a manageable cost of doing business with premium customers.

Automating Invoicing, Reminders, and Collections for HVAC Distributors

Manual accounts receivable processes are time-consuming and error-prone, particularly for HVAC suppliers managing multiple payment terms simultaneously. AI-powered automation platforms streamline the entire AR workflow from invoice creation through payment reconciliation.

Resolve's accounts receivable automation platform uses AI agents to manage workflows, automate payment reminders, and reduce friction in collections. The platform accepts ACH, wire, credit card, or check payments through a branded payment portal, ensuring contractors can pay however they prefer.

AI-Powered AR Platforms That Reduce Manual Work for HVAC Suppliers

Automated AR platforms provide several key benefits:

• Consistent payment reminders sent at predetermined intervals before and after due dates
• Automated reconciliation for any invoice structure—net terms, COD, or due upon receipt
• Real-time payment tracking across multiple payment methods
• Reduced manual data entry through automatic transaction syncing
• Centralized customer communication maintaining professional relationships

Multiple follow-up communications are typically required to successfully collect on past-due invoices, making automation essential for maintaining consistent collection efforts without overwhelming staff resources.

White-Label Payment Portals: Keep Your Brand Front and Center

White-label payment portals ensure that contractors see your branding throughout the payment process, maintaining your customer relationships while Resolve handles the payment processing and risk management. This approach allows you to own the customer experience while leveraging advanced payment infrastructure.

Integrating Net Terms into Your HVAC Ecommerce and ERP Systems

Modern HVAC suppliers need seamless integration between their ecommerce platforms, accounting systems, and credit management tools. Resolve's QuickBooks and ERP integrations fit directly into your B2B ecommerce and accounting stack with instant plug-ins, flexible APIs, and automated syncing.

Per Resolve's product documentation, the platform integrates with leading systems including QuickBooks Online, NetSuite, Sage Intacct, Magento, Shopify, and BigCommerce, ensuring that all transactions are automatically recorded and reconciled without manual intervention.

Plug-and-Play Checkout Extensions for HVAC Supply Stores

For ecommerce-focused HVAC suppliers, ecommerce checkout extensions for net terms enable contractors to apply for and receive instant credit approval during the online ordering process. Per Resolve's product documentation, some purchases up to $25,000 may qualify for instant approvals, dramatically improving conversion rates for larger equipment orders.

These extensions integrate seamlessly into existing ecommerce flows, providing a frictionless experience that doesn't disrupt established purchasing patterns.

Syncing Net Terms Invoices with QuickBooks and NetSuite

Automatic syncing ensures that all net terms transactions are properly recorded in your accounting system, with payments, advances, and fees accurately categorized. This eliminates manual bookkeeping errors and provides real-time visibility into accounts receivable status and cash flow projections.

Resolve automatically records and syncs all transactions to QuickBooks, ensuring that your financial records remain accurate and up-to-date without additional administrative burden.

Trade Credit Insurance: When HVAC Suppliers Should Consider It

Trade credit insurance provides protection against customer insolvency and non-payment, but it comes with premium costs and policy limitations. For many HVAC suppliers, non-recourse invoice financing provides comparable protection with integrated liquidity benefits.

Non-recourse financing typically covers buyer credit/default risk; coverage does not extend to disputes, fraud, or contractual issues—see program terms. Resolve takes on credit assessment, credit decision, and the majority risk of late payments or defaults.

Non-Recourse Financing vs. Trade Credit Insurance: Cost and Coverage Comparison

According to Allianz Trade and Coface, trade credit insurance typically ranges ~0.1–1.0% of covered sales depending on risk/coverage, plus deductibles and policy limits. Non-recourse financing bundles credit risk coverage with liquidity and may be more cost-effective overall when factoring cash flow benefits, though it is not necessarily a lower fee percentage than trade credit insurance.

Additionally, insurance policies often exclude certain types of losses or require complex claims processes, while non-recourse financing provides immediate protection without additional administrative burden.

How to Evaluate Whether Your HVAC Customer Portfolio Needs Insurance

Insurance may still be appropriate for suppliers with very large, concentrated customer portfolios or those serving high-risk industries. However, for most HVAC suppliers with diversified customer bases, integrated non-recourse financing provides comprehensive protection with lower administrative complexity.

Best Practices for Setting Net Payment Terms in the HVAC Industry

Effective payment term management requires a strategic approach that balances risk and opportunity. Rather than offering the same terms to all customers, successful HVAC suppliers implement tiered term structures based on customer creditworthiness and relationship value.

Resolve's B2B payments platform streamlines net terms, reconciliation, and invoicing with an AI-powered platform that lets customers pay on 30, 60, or custom terms while Resolve pays you immediately with up to 90% upfront on approved invoices.

Tiered Terms: Net 15 for New Customers, Net 60 for Top Contractors

A strategic term ladder might include:

• Net 15: New customers or those with limited credit history
• Net 30: Standard terms for established relationships
• Net 45-60: Premium terms for high-volume, reliable customers
• Net 90: Special terms for strategic accounts or large projects

This approach rewards loyalty and reliability while protecting against risk from unknown customers.

Offering Early Payment Discounts to Improve HVAC Supplier Cash Flow

Early payment discount structures like 2/10 Net 30 offer powerful incentives for faster payment while maintaining competitive flexibility. Early payment discounts can materially improve cash flow; impact depends on adoption rates and customer mix.

The 2/10 Net 30 structure allows customers to choose between paying within 10 days for a 2% discount or paying the full amount within 30 days. According to the Corporate Finance Institute, this represents an annualized return of approximately 36.7% (360-day basis) or ~37.2% (365-day basis) for the customer paying early, making it highly attractive while providing suppliers with faster cash conversion.

How Net Terms Drive Repeat Business for Local HVAC Suppliers

Extended payment terms aren't just about winning individual sales—they're about building long-term contractor relationships that drive repeat business and customer loyalty. When contractors know they can rely on consistent credit terms from their suppliers, they're more likely to consolidate their purchasing and develop deeper partnerships.

Resolve for Sellers gives your buyers the credit they need to expand their budgets and pull the trigger on larger purchases. Resolve pays you upfront for the Net 30-60 terms billed to your customers, and takes on billing, collections, and repayment risk, allowing you to focus on building relationships rather than managing collections.

How Regional HVAC Suppliers Use Net 60 to Drive Repeat Orders

Industry research consistently shows that suppliers offering flexible payment terms see significant increases in customer retention and order frequency. Contractors appreciate the financial flexibility that extended terms provide, particularly during seasonal peaks when cash flow is tight.

The switching cost of changing suppliers becomes substantial when contractors have established credit relationships, creating a competitive moat that protects against price-based competition.

Building Long-Term Contractor Relationships Through Flexible Payment Terms

Flexible payment terms signal trust and partnership rather than transactional relationships. When suppliers demonstrate understanding of contractors' cash flow challenges, they build goodwill that translates into preferential treatment during competitive bid situations and increased collaboration on complex projects.

Choosing the Right AR and Credit Platform for Your HVAC Supply Business

Selecting the right platform requires careful evaluation of features, integration capabilities, and total cost of ownership. Resolve's custom pricing and implementation includes ecommerce integration, accounting/ERP integration, net terms checkout extension, API access, and invoice advance payments with credit and AR insights dashboard.

Feature Checklist: What HVAC Suppliers Should Demand from a Net Terms Platform

Essential features include:

• Instant credit checks requiring minimal customer information
• Multiple payment methods including ACH, credit card, wire, and check
• White-label customer experience maintaining your brand relationships
• Seamless accounting integration with automatic reconciliation
• Non-recourse protection transferring default risk away from your business
• Flexible advance rates (90%, 75%, 50%) based on customer risk profiles
• Automated collections workflows reducing manual follow-up burden

Calculating Total Cost of Ownership: Fees, Implementation, and Staff Time

Total cost includes not just platform fees but also implementation costs, staff time savings, and risk reduction benefits. While fees vary by risk and agreement (refer to current pricing), the value proposition includes:

• Reduced bad debt through professional credit underwriting
• Lower collection costs through automation
• Improved cash flow through advance payment options
• Increased sales through competitive payment term offerings
• Staff productivity gains through reduced manual AR work

Frequently Asked Questions

What is the difference between Net 30 and Net 60 payment terms for HVAC suppliers?

Net 30 requires customers to pay within 30 calendar days of the invoice date, while Net 60 extends this to 60 days. Net 30 is the industry standard for typical equipment orders; Net 60 is typically reserved for larger commercial projects or strategic accounts. The extended timeline provides customers additional cash flow flexibility but creates longer working capital gaps for suppliers.

How do HVAC suppliers get paid faster when offering Net 60 or Net 90 terms?

HVAC suppliers can receive immediate payment while maintaining Net 60 or Net 90 terms for customers through non-recourse invoice financing platforms like Resolve. Per Resolve's product documentation, these solutions advance up to 100% of invoice value on eligible invoices (net of fees) within 24 hours of approval, with the financing partner assuming the buyer credit risk and handling collections.

What credit information should I check before approving a contractor for trade credit?

Before approving trade credit, HVAC suppliers should verify the contractor's payment history with other suppliers, business longevity, and financial stability indicators. Per Resolve's product documentation, modern credit platforms require only the customer's business name and address to conduct comprehensive credit assessments using AI models that evaluate thousands of data points from proprietary financial databases.

Can I automate payment reminders and collections without losing my customer relationships?

Yes, modern AR automation platforms use white-label features that maintain your branding throughout the payment process while automating reminders and collections workflows. AI-powered systems send professional, consistent payment reminders at predetermined intervals without requiring manual intervention, but all communications appear to come from your business, preserving customer relationships while ensuring systematic follow-up.

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.