Net payment terms, explained — Net 30 without the bad debt

"Do you offer terms?" is often the first question a serious buyer asks. Here's what they're asking for, why it matters, and how to say yes safely.

What "Net 30" actually means

Net terms are trade credit: you ship now, the buyer pays the invoice within an agreed window. Net 30 means payment is due 30 days from the invoice date; Net 15 and Net 60 work the same way. Variants you'll meet in the wild:

• 2/10 Net 30 — 2% discount if paid within 10 days, otherwise full amount in 30.
• Net 30 EOM — 30 days from the end of the invoice month.
• 50% deposit, balance Net 30 — common for first large orders.

Why buyers expect terms

A boutique buying your product for resale has to sell it before the money comes back. Terms let their cash cycle work: receive in week 1, sell through weeks 2–4, pay you in week 5. Many purchasing departments are simply not allowed to prepay vendors — no terms, no purchase order. Offering Net 30 isn't generosity; it's the price of admission to wholesale.

The risk, stated plainly

Terms mean you're lending your product. Most buyers pay; some pay late; a few never do. The goal isn't zero risk — it's sized risk: small limits for new accounts, growth for good payers, and early, systematic follow-up. Late payments usually come from disorganization, not malice — which is why reminders work so well.

Five rules for offering terms safely

1. First order prepaid, always. Terms start on order two.
2. Set a credit limit per account — about 2× their average order to start.
3. Put terms in writing on every document — the proforma, the invoice, the statement.
4. Remind before the due date, not after. A T-7 nudge ("invoice due next week") prevents most lateness. Then due-date and overdue follow-ups on a schedule, automatically.
5. Watch your aging weekly. Current / 1–30 / 31–60 / 60+ buckets tell you who to call and whose credit to pause. A buyer at 60+ doesn't get new stock on terms — full stop.

Tracking terms on Shopify

Shopify itself records an unpaid order, but it won't track due dates, send reminder sequences, or show an aging report — that's accounts-receivable work. You can run it in a spreadsheet up to a handful of accounts; past that it slips. TAGTrade's net-terms module creates a receivable from every terms order, runs the reminder schedule, keeps an append-only ledger, and generates monthly statements per buyer.