How to Set Payment Terms for Commercial Customers
Offer net 15 or net 30 to commercial customers who need terms, price the wait into your commercial rate, and set a credit limit per account before the first job rather than after a large one. New accounts should start with a smaller limit and payment on the first job or two, and any account whose balance exceeds what you could survive losing needs terms tightened, not extended.
Terms are a loan, so treat them like one
When you invoice net 30, you’re basically lending that customer money — unsecured, at 0% interest — and funding their operations out of your own account.
That’s a perfectly good business decision for the right customer. It’s a pretty bad one to make by default just because someone asked.
Who deserves terms
- Repeat commercial accounts with real volume
- Property managers, chains, and institutions who genuinely cannot pay on the day
- Customers whose work requires no marketing to win
Not: a residential customer who’d simply prefer to pay later, or a new account whose first job happens to be your largest.
Check credit on new accounts — two phone calls
Ask for two trade references and actually call them. One question is enough: do they pay on time?
Check how long the business has been operating too. Any legitimate company will hand over references without hesitation — if they’re reluctant, that’s your answer right there, and this one simple step heads off most commercial bad debt.
Set a credit limit before the first job
The limit is the maximum an account can owe before you pause work. Set it at a number you could genuinely survive losing entirely, which for most solo operators is smaller than your gut says it should be.
Start new accounts low, and raise it after six months of clean payment. Write the limit down somewhere — a limit that only lives in your head is one you’ll talk yourself past the first time you’re busy.
Price the wait
A commercial rate should reflect thirty days of financing baked in. Or offer 2% off for payment within ten days instead — plenty of companies take that deal, and it costs you a lot less than the wait does.
What you don’t want to do is quote residential prices on commercial terms and just quietly eat the gap.
Pause work at the limit, calmly
The moment an account goes over its limit, stop scheduling and say why in one neutral sentence. This is exactly the spot where operators keep working out of politeness and then discover months later how much they’d actually lent out.
Invoice the day the work is done
Nearly all slow commercial payment is a paperwork problem, not a refusal — a wrong PO, a missing site code, an invoice that landed after the approval cycle closed. Complete, correct, and same-day is basically the whole secret to getting paid on schedule by an organization.
Frequently asked questions
Should I offer net 30 at all?
Only if the volume justifies it. Terms are a real service you're providing — you're lending money at 0% — and they're worth offering to accounts that give you steady, repeat, no-marketing work. They're not worth offering to a one-off customer who simply prefers not to pay today.
How do I check credit on a new commercial account?
Ask for trade references and call two of them, check how long they've been in business, and start with a modest credit limit. Two phone calls prevent the majority of commercial bad debt, and any legitimate business will hand you references without hesitation.
Should I charge more for customers on terms?
Yes — a commercial rate that accounts for the wait, or an early-payment discount that gives them a way out of it. Waiting 30 days has a real cost, and pricing it is far more honest than resenting it later.
What's a credit limit and how do I set one?
The maximum you'll let an account owe at any time before work pauses. Set it at an amount you could genuinely absorb losing — for most solo operators that's smaller than they'd like to admit — and review it upward once an account has paid reliably for six months.