Jul 02, 2026
Plumbing supply distributors face a fundamental dilemma: contractors often need extended payment terms to manage project cash flow, yet waiting 60 days for payment can strain a distributor's working capital. Construction businesses commonly use invoice terms, and fewer than four in 10 construction businesses report getting paid within 30 days on average based on construction payment data. For distributors, the answer is not to stop offering terms. It is to use modern net terms financing that turns approved receivables into faster cash flow while shifting much of the credit and collections burden away from the distributor.
Key Takeaways
- Net 60 can support contractor purchasing: Extended terms help contractors align material purchases with project payment cycles while keeping plumbing suppliers competitive.
- Late payment risk needs structure: North American B2B sellers still face overdue invoices and bad debt risk, making stronger credit controls essential.
- Cash flow should not depend on waiting: Resolve Pay can advance funds on approved invoices while buyers keep their agreed payment timeline.
- Non-recourse support reduces exposure: Resolve Pay takes on the credit assessment, credit decision, and the majority risk of late payments or defaults for approved buyers.
- Automation lowers AR workload: Automated invoicing, reminders, reconciliation, and collections workflows help distributors reduce manual receivables work.
- Credit decisions can move faster: Resolve Pay uses AI-powered credit workflows to evaluate buyer data and streamline approvals.
- Integrated systems make terms scalable: Ecommerce, ERP, and accounting integrations help distributors offer terms without rebuilding their finance stack.
Understanding Net 60 Payment Terms in the Plumbing Supply Industry
The basics of extended payment terms
Net 60 payment terms give buyers 60 calendar days from the invoice date to pay the full amount owed. This 60-day period includes weekends and holidays, making precise due date tracking important for both parties. The terms represent a trade credit agreement where the supplier effectively extends short-term purchasing flexibility to the buyer.
Common variations include early payment discounts that incentivize faster collection:
- 2/10 Net 60: Buyer receives a discount if paid within 10 days
- 1/10 Net 60: Buyer receives a smaller discount if paid within 10 days
- Net 60 EOM: Payment is due 60 days after the end of the month
For plumbing supply distributors, these terms appear on invoices as straightforward payment deadlines. However, the accounting implications extend beyond simple due dates. Revenue recognition, cash flow forecasting, payment reminders, and working capital planning all depend on accurately tracking extended payment windows.
Why Net 60 appeals to plumbing contractors
Contractors operate on project-based payment cycles where they often do not receive payment until job completion or milestone achievements. A commercial plumbing project may run for weeks or months, yet fixtures, pipe, valves, fittings, and related materials often need to be purchased upfront.
Net 60 terms provide contractors with:
- Cash flow alignment between material purchases and project payments
- Working capital preservation for labor, equipment, fuel, and jobsite expenses
- Flexibility to bid on larger projects without immediate capital pressure
- Competitive positioning when submitting project proposals
This buyer preference creates a competitive pressure for distributors. Companies that cannot offer flexible terms may lose opportunities to suppliers that make it easier for contractors to buy now and pay after project cash comes in.
The Cash Flow Challenge with Extended Payment Terms
The direct impact of Net 60 on supplier cash flow
The core problem is timing mismatch. Plumbing distributors may need to pay manufacturers, freight providers, and other vendors before their contractor customers pay them. If suppliers expect payment earlier than customers pay invoices, the distributor has to finance that gap.
Consider a common scenario: a distributor supplies fixtures, valves, and pipe materials for a commercial job. The contractor receives Net 60 terms, but the distributor still has payroll, rent, inventory replenishment, delivery costs, and supplier obligations due before the invoice is collected. The distributor is now carrying that receivable while also funding the next set of orders.
Multiply this across dozens or hundreds of active invoices, and distributors can quickly have substantial working capital tied up in receivables they cannot use for inventory, sales growth, or operating expenses.
The U.S. Census Bureau's Quarterly Financial Report tracks financial results and balance sheet data across industries, including wholesale trade, which reinforces how important receivables management is for distributors. In practice, a plumbing supplier's growth can create more cash pressure if sales increase faster than collections.
Common cash flow hurdles for plumbing supply dealers
Beyond timing, plumbing distributors face compounding challenges:
- Late payments: The Atradius 2025 North America report found persistent overdue payment pressure across B2B trade credit, with the U.S. showing a large share of overdue credit-based sales in its payment practices report.
- Bad debt exposure: Even a small share of uncollectible invoices can create meaningful losses when order sizes are large.
- Inventory constraints: Limited cash can prevent a distributor from stocking high-demand SKUs or preparing for seasonal demand.
- Growth limitations: A distributor may hesitate to take on larger contractors or projects if every new order creates more receivables pressure.
- Vendor relationship strain: Late payments to suppliers can damage purchasing terms and limit future flexibility.
For plumbing supply companies, the challenge is not just offering Net 60. The challenge is offering Net 60 without turning every growth opportunity into a cash flow problem.
The Role of Embedded B2B Buy Now Pay Later
Bringing embedded net terms to B2B purchasing
The same buy now, pay later concept that transformed consumer retail is now becoming part of B2B commerce. Embedded B2B BNPL allows plumbing contractors to apply for payment terms directly within the buying process, whether online, through a field sales rep, or through a merchant's internal ordering workflow.
This approach modernizes the traditional trade credit process by:
- Replacing paper credit applications with digital workflows
- Streamlining credit decisions
- Integrating terms into ecommerce checkout flows
- Giving buyers clearer payment schedules
- Helping sellers reduce manual credit and collections work
For plumbing distributors, embedded net terms mean offering competitive Net 30, Net 60, or Net 90 options without managing every part of credit assessment, collections, and risk exposure internally.
How embedded solutions streamline transactions
Resolve Pay's B2B payments platform helps sellers offer net terms, payments, invoicing, and reconciliation through a connected B2B payments workflow. Resolve Pay also supports ecommerce and finance stack connections, including systems such as QuickBooks Online, Xero, Sage Intacct, NetSuite, Magento 2, BigCommerce, and custom API integrations through its integration options.
A typical embedded net terms flow works like this:
- Buyer adds products to cart or places an order through the sales team
- Buyer selects a net terms payment option or applies for terms
- Resolve Pay evaluates the buyer through its credit workflow
- Approved buyers receive available terms and credit options
- Order is completed with the agreed terms
- Distributor receives funding on the approved invoice based on the applicable advance structure
For pre-approved buyers, the process can feel even more direct because the buyer can see available purchasing power without repeating a full manual application each time.
Securing Liquidity with Net Terms Financing Solutions
Converting approved invoices into faster cash
Net term financing changes the economics of offering extended terms. Instead of waiting 60 days or longer for payment, distributors can receive an advance on approved invoices while buyers keep their agreed payment schedule.
Resolve Pay's B2B net terms product states that it underwrites customers in real time and can advance up to 90% of approved invoice value within 24 hours, with advance payment deposited within 1 to 2 business days after the approved invoice is submitted. Resolve Pay's broader net terms materials also describe advance pay structures that may reach up to 100% depending on the product, risk profile, and approved invoice.
This liquidity transformation works through a straightforward process:
- Distributor issues or submits an approved invoice with payment terms
- Resolve Pay handles underwriting and advance eligibility
- Distributor receives the approved advance
- Contractor pays on the agreed terms
- Resolve Pay manages payment workflows and collections support
The result is a shorter cash conversion cycle for the distributor. Instead of tying up capital in receivables for months, the distributor can use the cash to replenish inventory, pay suppliers, support sales, and serve more contractors.
Minimizing risk through non-recourse support
The non-recourse structure is important for distributors that want to offer terms without absorbing every credit loss. Resolve Pay states that it takes on the credit assessment, credit decision, and the majority risk of late payments or defaults, so merchants are not on the hook if an approved customer fails to pay.
This shifts much of the risk burden away from the distributor:
- If the approved buyer pays on time: The transaction completes normally.
- If the approved buyer pays late: Resolve Pay manages reminders and collections workflows.
- If the approved buyer defaults: Resolve Pay absorbs the covered risk under the applicable approved invoice structure.
For plumbing distributors that have experienced contractor defaults, delayed project payments, and customer disputes, this risk transfer can provide meaningful protection while allowing the distributor to keep offering terms.
Resolve Pay's net terms platform supports credit checks, payment and collections management, advance pay, and white-label features so distributors can maintain customer relationships while improving cash flow.
Automating Accounts Receivable for Plumbing Supply Distributors
Streamlining the collections process
Offering Net 60 terms without automation creates operational strain. Traditional AR processes become harder to manage as invoice count, customer count, and payment timelines grow.
Manual collections often involve:
- Tracking invoice due dates across spreadsheets
- Sending individual follow-up emails
- Making phone calls to late-paying accounts
- Reconciling payments against open invoices
- Managing disputes and short payments
- Escalating seriously delinquent accounts
Communication gaps can tie up capital even when customers intend to pay. Invoices get missed, reminders go unanswered, and unclear payment instructions create avoidable delays. For distributors operating on high-volume, repeat orders, those delays add up quickly.
Reducing manual AR overhead
Resolve Pay's accounts receivable automation platform is designed to automate the receivables workflow from credit checks and invoice management to payment collection and reconciliation.
Key AR automation capabilities include:
- Automated invoicing with embedded payment workflows
- Payment reminders that reduce manual follow-up
- Payment reconciliation that helps match transactions back to invoices
- ERP and accounting sync across supported finance systems
- Credit and AR visibility through centralized dashboards
- Branded payment portals that support buyer payment options
Resolve Pay's agentic collections capabilities extend this workflow with AI-powered collections support for outbound communication and follow-up. For plumbing distributors, that means AR teams can spend less time chasing routine payments and more time managing exceptions, customer relationships, and strategic accounts.
AI-Powered Credit Decisions for Plumbing Supply Clients
Speeding up credit application turnaround
Traditional business credit checks often require forms, references, financial statements, and manual review. That process can slow down sales, especially when a contractor needs materials quickly to keep a job moving.
Resolve Pay's business credit check workflow requires a customer's business name and address and can deliver results within 24 business hours. Resolve Pay's broader ecommerce materials also state that some purchases up to $25,000 may qualify for instant approvals through its net terms checkout experience.
This helps distributors move faster when contractors request payment terms. Instead of delaying the order while internal teams review credit manually, Resolve Pay can support a more streamlined approval process.
Improving risk assessment with better credit workflows
The challenge for plumbing distributors is not just speed. It is also making credit decisions that match each buyer's risk profile. Many suppliers extend terms based on relationship history alone, which can leave them exposed when a buyer's cash position changes.
Resolve Pay's credit engine evaluates buyer data points, including cash flow trends and behavioral signals, to support dynamic credit decisions. Its credit workflow also allows quiet pre-approval checks using basic business information, helping distributors evaluate risk without creating unnecessary friction for the customer.
This approach helps plumbing suppliers:
- Evaluate new customers more consistently
- Support repeat buyers with appropriate credit lines
- Reduce manual underwriting workload
- Offer terms with stronger risk controls
- Expand sales without relying only on gut feel
For distributors trying to grow, better credit decisions make it easier to say yes to the right customers while protecting working capital.
Beyond Traditional Factoring: A Modern Alternative for Cash Flow Management
Why many distributors look beyond traditional factoring
Invoice factoring has existed for decades, and it can provide cash flow support in some situations. However, many plumbing distributors want a more integrated approach that supports payment terms, credit decisioning, customer experience, and AR automation together.
Common concerns with traditional factoring include:
- Customer relationship disruption when collections feel disconnected from the seller
- Manual paperwork and slower onboarding
- Confusing fee structures in some arrangements
- Recourse risk depending on the contract
- Limited connection to ecommerce and ERP workflows
The point is not that factoring never works. The point is that many modern B2B distributors need more than a financing transaction. They need a credit-to-cash workflow that supports how customers buy.
Comparing financing structures
The distinction matters for plumbing supply companies evaluating options.
Traditional invoice factoring may include:
- Invoice advances based on eligible receivables
- Contract terms that vary by provider
- Possible recourse provisions
- Third-party collections involvement
- Separate processes from ecommerce and ERP systems
Resolve Pay's net terms financing model can include:
- Advance payment on approved invoices
- Non-recourse support for approved buyers
- Credit decisioning and underwriting workflows
- Collections and payment reminders
- White-label payment experience
- ERP, accounting, and ecommerce integrations
Resolve Pay operates as a factoring alternative for B2B merchants that want to offer net terms, improve cash flow, reduce bad debt exposure, and preserve customer relationships through a more embedded payment experience.
Optimizing Operational Efficiency for Plumbing Suppliers
Reducing administrative burden with integrated systems
The operational benefits extend beyond cash flow. Plumbing distributors using integrated AR and net terms platforms can reduce manual work across credit applications, invoice tracking, payment reminders, and reconciliation.
Resolve Pay's ERP integrations help connect payment and receivables workflows with existing systems. Supported connections include:
- Ecommerce platforms: Shopify, BigCommerce, Magento 2, and WooCommerce
- Accounting systems: QuickBooks Online and Xero
- ERP systems: NetSuite, Sage Intacct, and custom API options
Invoice data can flow into Resolve Pay, payment status can sync back, and the distributor's finance stack can stay more current without duplicate entry. For businesses with high invoice volume, that integration matters because every manual touchpoint creates more room for delay or error.
Investing in growth, not collections
When plumbing distributors reduce the friction of offering net terms, they can focus more attention on growth. Flexible terms help contractors buy the materials they need, while automated credit and AR workflows help the distributor avoid taking on unnecessary operational burden.
A stronger net terms process can support:
- Larger orders from qualified buyers
- Repeat purchasing from contractors who value payment flexibility
- Faster cash availability for inventory replenishment
- More consistent collections follow-up
- Less manual work for finance and sales teams
For plumbing supply companies competing on service, availability, and relationships, the ability to offer Net 60 without sacrificing cash flow can become a practical advantage.
Transform Your Plumbing Supply Business with Net Terms Financing
Offering Net 60 terms does not have to drain working capital or expose plumbing distributors to unmanaged credit losses. Resolve Pay helps transform the economics of extended payment terms by combining net terms financing, non-recourse support for approved buyers, credit decisioning, AR automation, and integrations with ecommerce, ERP, and accounting systems.
The result is a more scalable way to serve contractors. Buyers can keep the payment flexibility they need, while distributors can get paid faster, protect cash flow, and reduce the manual burden of managing receivables.
For plumbing supply companies ready to grow without creating a larger cash flow squeeze, Resolve Pay provides a practical path forward: offer competitive payment terms, automate the credit-to-cash process, and keep working capital available for the next order, the next customer, and the next growth opportunity.
Frequently Asked Questions
How does offering Net 60 terms benefit a plumbing supply company's customers?
Net 60 terms help contractors align material purchases with project payment schedules. Since contractors may not receive payment until milestones or job completion, extended terms let them buy required materials without immediately tying up all available working capital.
What happens if a buyer approved by Resolve Pay defaults on their payment?
Resolve Pay's non-recourse structure means Resolve Pay takes on the credit assessment, credit decision, and the majority risk of late payments or defaults for approved buyers. This helps protect distributors from bearing the full risk of approved customer nonpayment.
Can Resolve Pay integrate with accounting software used by plumbing supply companies?
Yes. Resolve Pay supports integrations with systems such as QuickBooks Online, Xero, Sage Intacct, NetSuite, Magento 2, BigCommerce, and custom API integrations. These connections help sync invoice, payment, and reconciliation workflows with the distributor's finance stack.
How quickly can a plumbing supply business start offering terms through Resolve Pay?
Implementation timing depends on the ecommerce, ERP, accounting, and workflow setup involved. Once configured, Resolve Pay can support fast buyer credit workflows and advance payment on approved invoices based on the applicable funding structure.
What credit limits are available for plumbing contractor customers?
Credit limits depend on the buyer's business profile, verification results, transaction size, and Resolve Pay's credit decisioning process. Some ecommerce purchases up to $25,000 may qualify for instant approvals, while larger or more complex requests may require additional review.
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.
