Net-30/60 Payment Terms Policy Template
TLDR
Most wholesale businesses handle payment terms informally until a bad debt forces them to write something down. This template gives you a structured policy covering standard terms, credit applications, late penalties, and dispute procedures so your terms are clear before the first overdue invoice.
Standard Payment Terms
Your standard terms are the default for every buyer account. Spell them out clearly so there is no ambiguity about when payment is due.
Here is a baseline you can adapt:
Net-30 Terms
- Payment is due in full within 30 calendar days from the invoice date
- The invoice date is the date of shipment, not the date of order placement
- Partial payments are not accepted unless explicitly authorized in writing
- All amounts are in USD unless otherwise specified
Net-60 Terms (for qualifying accounts)
- Payment is due in full within 60 calendar days from the invoice date
- Net-60 is available only to accounts that have maintained a clean payment history for at least 6 months on net-30 terms
- The seller reserves the right to revert an account to net-30 if two or more invoices are paid late within a 12-month period
Prepayment / COD Terms (for new or high-risk accounts)
- New accounts without established credit begin on prepayment or cash-on-delivery terms
- Prepayment accounts may apply for net-30 terms after three consecutive prepaid orders totaling at least $5,000
Customize the dollar thresholds and timeline to match your business. The specifics matter less than having them written down and consistently applied.
One decision you need to make: does your payment clock start on the invoice date or the delivery date? Invoice date is simpler to track. Delivery date is more buyer-friendly because it does not penalize them for transit time. Pick one, document it, and do not vary it between accounts without a contractual reason.
Credit Application Process
Before extending net terms to any buyer, you need a credit application. Running terms without an application is the number one cause of bad wholesale debt.
Your credit application should collect:
Business information:
- Legal business name and DBA (doing business as)
- Business address, phone, and primary contact
- Tax ID / EIN
- Years in business
- Annual revenue range (optional but useful for setting credit limits)
- Business type (corporation, LLC, sole proprietorship, partnership)
Trade references:
- Three trade references with company name, contact person, phone, and email
- The references should be other suppliers who extend credit to this buyer
- Require at least two references that have been active for 12+ months
Bank reference:
- Bank name, branch, and account manager contact
- Checking account number (optional, depends on your comfort level)
Authorization:
- A signed statement authorizing you to check trade and bank references
- Agreement to your payment terms, late fees, and dispute procedures
- Personal guarantee (optional, common for smaller businesses)
Set a turnaround time for credit decisions. Five business days after receiving a complete application is reasonable. If you cannot verify references in that time, communicate the delay to the buyer rather than leaving the application in limbo.
Your credit review should check:
- All three trade references confirm on-time or near-on-time payment
- Bank reference confirms a business checking account in good standing
- The business has been operating for at least 12 months (adjust based on your risk tolerance)
- No red flags on a basic business credit check (D&B, Experian Business, or similar)
Document your approval criteria so the decision is repeatable and not based on gut feeling. When you hire someone to handle accounts receivable later, they need to follow the same process.
Net-30/60 Payment Terms Policy Template
A ready-to-use payment terms policy template covering credit applications, net-30/60 terms, late penalties, credit limits, early payment discounts, and dispute resolution for wholesale businesses.
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