Large B2B distributors like Veritiv may extend payment terms to approved business customers. Veritiv's published Terms of Sale state that all orders are subject to approval by its Credit Department and that invoice payment is due according to the payment terms approved for the buyer. For manufacturers, wholesalers, and distributors looking to compete at this level, understanding how net terms work is essential. With Net 30 being the most widely used payment term across B2B industries and businesses reporting a 40% increase in average order value when offering net terms, mastering this financing model can support stronger sales performance while maintaining healthy cash flow.
Veritiv Corporation operates as one of North America's largest packaging distributors and business-to-business solutions providers. Like most major B2B distributors in this space, Veritiv typically offers payment terms to qualified business customers, allowing them to receive products and pay within an agreed timeframe rather than requiring immediate payment at delivery.
Payment terms define when and how buyers must pay for goods or services received. In B2B commerce, the most prevalent structures include:
Net 30 has emerged as the dominant standard because it balances seller cash flow requirements with buyer processing capabilities. The 30-day window gives purchasers sufficient time to process invoices through their accounts payable systems while ensuring sellers receive payment within a reasonable timeframe.
Veritiv states that all orders are subject to approval by its Credit Department, which determines the payment terms applicable to each buyer. Veritiv also reserves the right to revise credit limits or payment terms, withhold shipments when it has concerns about a buyer's ability to pay, and require deposits or prepayments for equipment purchases.
This approach reflects standard practice among major distributors, where credit evaluation helps manage risk while building relationships with new customers. For businesses looking to offer similar competitive terms to their own buyers, understanding this model provides a foundation for structuring your own trade credit programs.
Net 30 payment terms mean the buyer has 30 calendar days from the invoice date to submit full payment. This seemingly simple arrangement creates a complex interplay between buyer purchasing power and seller cash flow management.
When you offer Net 30 terms, you deliver products or services immediately but wait up to a month for payment. This creates what financial professionals call a "cash conversion gap" where your working capital sits tied up in accounts receivable rather than fueling operations.
The impact compounds as your business scales:
Meanwhile, your operational expenses continue without pause. Payroll, supplier invoices, rent, and utilities all demand immediate payment regardless of when your customers pay you. This structural mismatch explains why so many growing B2B companies struggle with cash flow despite strong sales.
For Buyers:
For Sellers:
Key Considerations:
While offering net terms drives sales growth, traditional in-house management of these programs creates operational and financial considerations that businesses must address as they scale.
The cash flow gap created by net terms directly affects growth capacity. Consider a manufacturer with $2 million in monthly sales on Net 30 terms. At any given time, they carry roughly $2 million in outstanding receivables, representing working capital they cannot deploy for:
This constraint becomes more acute during growth phases. Winning a major new account that orders $500,000 monthly on Net 60 terms requires $1 million in additional working capital just to support that single relationship.
Managing net terms in-house generates significant administrative work:
Credit Analysis Requirements:
Accounts Receivable Administration:
Collections Management:
Resolve Pay customer Trenchless Supply reported that the work required from its team decreased by at least 90% after Resolve Pay automated a two-way integration, showing how automation can substantially reduce manual AR work.
Despite the challenges, offering trade credit remains one of the most powerful tools for B2B growth. Understanding how to leverage this capability strategically can transform payment terms from a cost center into a competitive advantage.
Business owners who offer net terms consistently outperform competitors who demand immediate payment. This advantage stems from several factors:
Expanded Market Reach: Many potential customers face their own cash flow constraints. Requiring prepayment eliminates these buyers from your addressable market entirely. Flexible terms allow you to serve businesses that would otherwise purchase from competitors.
Larger Order Sizes: When buyers aren't constrained by immediate cash availability, they tend to purchase in larger quantities. The 40% increase in average order value that businesses report when offering net terms directly impacts revenue without requiring additional customer acquisition.
Reduced Price Sensitivity: Customers receiving favorable payment terms often prioritize supplier reliability over the lowest possible price. This reduces competitive pressure on margins while building stronger relationships.
Repeat Purchase Patterns: Established credit relationships create natural retention. Buyers with approved credit limits and payment history with your company experience smoother transactions, increasing loyalty.
Trade credit manifests differently across industries based on transaction patterns and operational requirements:
Manufacturing and Distribution:
Construction and Contracting:
Food Service and Perishables:
Understanding industry norms helps you position your terms competitively while managing cash flow effectively.
Extending credit to business customers inevitably means accepting some level of default risk. Managing this risk effectively determines whether your net terms program generates profitable growth.
Trade credit insurance protects sellers against customer defaults by reimbursing a percentage of unpaid invoices. This coverage makes sense when:
Traditional trade credit insurance provides valuable protection but requires premium costs, claims processes, and ongoing monitoring to maintain coverage.
Non-recourse financing offers an alternative approach where the financing provider assumes default risk rather than the seller. Unlike traditional factoring with recourse provisions, non-recourse arrangements mean that if an approved buyer fails to pay, the seller keeps the advance without repayment obligation.
This model fundamentally changes the risk equation:
Traditional Net Terms:
Non-Recourse Net Terms Financing:
For businesses seeking to offer competitive terms without accepting substantial credit risk, non-recourse financing provides a structural solution. The factoring alternative model has evolved significantly, with modern platforms offering higher advance rates and faster funding.
Manual AR management becomes increasingly challenging as transaction volumes grow. Accounts receivable automation transforms these processes from labor-intensive tasks into efficient, scalable operations.
Effective AR automation addresses the full invoice-to-cash cycle:
Invoice Generation and Delivery:
Payment Tracking and Reconciliation:
Reporting and Analytics:
Integration Capabilities:
Automated collection workflows replace manual follow-up with systematic, consistent communication:
This systematic approach ensures no invoice falls through the cracks while maintaining professional relationships. Automated systems pause when payments or disputes are received, preventing embarrassing duplicate contacts.
The efficiency gains are substantial. Businesses implementing AR automation report reducing manual AR workload by up to 90%, freeing staff for higher-value activities while improving collection rates.
When net terms create cash flow gaps, businesses traditionally turn to financing solutions that convert receivables into immediate working capital. Understanding your options helps identify the best fit for your situation.
Traditional invoice factoring involves selling your receivables to a factoring company at a discount:
While factoring provides faster access to cash, it comes with considerations:
Modern net terms financing platforms have evolved beyond traditional factoring by combining faster access to working capital with credit and accounts receivable workflows.
Higher Advance Availability: Resolve Pay can advance up to 90% on approved net terms invoices, depending on the applicable transaction and buyer approval.
Faster Funding: Resolve Pay states that approved invoice advances are generally delivered within 1-2 business days, while some product workflows provide funding within 24 hours.
Non-Recourse Protection: Unlike recourse factoring where you repay if customers default, non-recourse financing means the platform absorbs credit losses on approved invoices.
White-Label Experience: Modern platforms maintain your branding throughout the customer experience, unlike factors who may contact customers directly.
Integrated Operations: Rather than separate factoring relationships, integrated platforms combine credit decisioning, payment processing, and AR management in unified solutions.
For businesses evaluating AR financing options, these evolved capabilities represent a significant advancement from traditional factoring models.
The speed and accuracy of credit decisions directly impact your ability to convert prospects into customers and grow wallet share with existing accounts. Traditional manual underwriting creates bottlenecks that AI-powered systems eliminate.
Manual credit evaluation requires analysts to gather information from multiple sources:
This process takes 1-2 weeks per new customer, creating friction that can lose sales to faster competitors. Buyers waiting for credit approval may purchase from alternatives offering immediate terms.
AI-powered credit engines compress this timeline dramatically by:
Modern platforms deliver credit decisions in under 24 hours, with many approvals completing in minutes for straightforward applications. This speed transforms credit from a sales obstacle into a competitive advantage.
Static credit limits based on point-in-time evaluations fail to capture evolving customer relationships. Dynamic credit management adjusts limits based on actual behavior:
Positive Signals:
Warning Signals:
AI systems monitor these signals continuously, recommending limit adjustments before problems develop rather than reacting after issues occur. This proactive approach maximizes sales opportunities with creditworthy customers while managing emerging risks.
Collections represent a delicate balance. Professional tactics recover cash while maintaining relationships and brand reputation. Modern agentic collections systems find the optimal path.
Effective collections recognize that most late payments stem from operational issues rather than intent to avoid payment:
Professional collection approaches address these root causes:
Early Communication: Reaching out before due dates catches issues while easy to resolve. A friendly reminder about an upcoming payment often prompts action before invoices become overdue.
Multiple Channels: Some buyers respond to email, others to SMS, others to phone calls. Multi-channel outreach increases contact rates without requiring escalation.
Clear Resolution Paths: Providing easy options to pay, dispute, or request extensions reduces friction. Online portals with streamlined payment eliminate excuses.
Consistent Follow-Up: Regular, predictable communication patterns train buyers to expect contact and prioritize payment. Consistent collection efforts support healthy payment behavior.
AI-powered collection systems bring capabilities impossible to replicate manually:
Intelligent Sequencing: Rather than fixed schedules, AI determines optimal contact timing based on buyer behavior patterns, industry norms, and historical response data.
Personalized Messaging: Templates adapt based on relationship history, payment patterns, and communication preferences. Long-term customers receive different treatment than first-time late payers.
Voice AI Capabilities: Automated outbound calls handle routine follow-up at scale, freeing human collectors for complex negotiations. Natural language processing enables conversational interactions.
Automatic Pause Logic: Systems recognize when payments are received, disputes are logged, or customer service issues are flagged, automatically pausing collection activity to prevent duplicate contacts.
These capabilities explain why modern platforms reduce DSO while maintaining customer relationships.
The payment experience shapes buyer perception of your business. Streamlined, branded portals eliminate barriers that delay payment and frustrate customers.
Buyer expectations have evolved significantly. Customers who experience convenient checkout in their personal lives expect similar ease in business transactions. Meeting these expectations requires:
Single Sign-On Access: One login provides access to all invoice, payment, and credit information without navigating multiple systems.
Mobile-Responsive Design: Buyers reviewing invoices on phones during commutes or job sites need interfaces that work on any device.
Real-Time Information: Current balances, payment history, and credit availability displayed without delay or manual updates.
Self-Service Capabilities: Options to make payments, request payment plans, flag disputes, and download statements without requiring phone calls or emails.
White-label payment portals maintain your branding throughout this experience, reinforcing your relationship.
B2B buyers have varying preferences and constraints around payment methods. Accommodating these preferences accelerates collections:
ACH Transfers: Low-cost option preferred for recurring payments. Direct bank transfers avoid card fees while providing reliable settlement.
Wire Transfers: Necessary for large transactions or international payments. Guaranteed funds offset higher fees.
Credit Cards: Some buyers prefer cards for points, expense tracking, or cash flow management.
Check Processing: Legacy systems still require check acceptance for some buyers. Digital processing accelerates clearing times.
Payment Plans: Options to split large invoices over multiple installments capture sales that might otherwise be constrained by budget timing.
Providing these options within a unified portal simplifies buyer decisions while maximizing your collection rate regardless of their preferred payment method.
Resolve Pay combines payment terms, credit risk management, AR automation, and collections in one platform built for B2B sellers.
For manufacturers, distributors, and wholesalers, Resolve provides the infrastructure to offer competitive terms without taking on the same cash flow strain and credit risk. Resolve originated as a B2B payments spinout from Affirm, has raised $60 million, serves more than 15,000 businesses, and states that it is SOC 2 Type II attested.
Net 30 represents the dominant standard in B2B commerce. This 30-day payment window balances buyer processing needs with seller cash flow requirements. Other common structures include Net 60 and Net 90 for larger transactions, 2/10 Net 30 offering early payment discounts, and industry-specific variations.
Businesses that offer flexible payment terms consistently outperform competitors requiring immediate payment. Primary benefits include a 40% increase in average order value as buyers purchase more when not constrained by immediate cash requirements, expanded market reach to buyers who cannot prepay, stronger customer relationships, and competitive differentiation.
The primary considerations include cash flow gaps where you deliver goods immediately but wait 30-90 days for payment while operational expenses continue, credit default risk if customers fail to pay, administrative overhead managing invoices and collections, and opportunity cost of working capital tied up in receivables rather than fueling growth.
Modern net terms financing platforms allow sellers to offer Net 30/60/90 terms to buyers while receiving payment advances within 1-2 business days. The financing provider pays you immediately and collects from the buyer on the original terms. Non-recourse arrangements mean the financing provider bears the credit risk if approved buyers default.
Traditional invoice factoring typically advances a percentage of invoice value with recourse provisions, meaning you repay if customers default. Non-recourse financing can advance up to 90% of invoice value without recourse, meaning the financing provider absorbs credit losses on approved invoices. Modern platforms also provide faster funding and integrated AR management capabilities.
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.