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When does NET30 start?


May 26, 2004
Paradise, Ca
I have very rarely had to ship any parts to a customer, and when I did, it was to very small shops who always paid promptly so I never needed to worry about this.

I've got a new customer who I ship to. They like to take their sweet time paying invoices, so my question is, when does NET30 actually start? The internet says when the invoice is delivered. But to me, it seems more appropriate to start the clock when the parts hit their dock (or where scheduled to hit their dock, as in the case of FOB Origin?)

I'm new to shipping stuff to a big company, so any other tips or gotchas are welcome.
When I do net 30 it's from the invoice date, and the invoice date is when I send or hand them the invoice. It's also usually the day it gets picked up or shipped out.
I'm the same as you guys. I invoice the same day or one day prior to parts leaving our shop, so my NET30 timing is correct in Quickbooks. Thank you.

This is the same as I've always done, but our big customer who got shut down was just in the next town, so we used a courier to deliver the same day as the invoice was made.
When using quickbooks it sets up a packing slip and invoice at the same time. You can have them emailed when your making the packing slip for the shipment. I get invoices from time to time before I receive the package.

No one cares if you pay 5-10 days late. It can be the post offices fault for taking to long. Not much to worry about.

Just make the invoice when making the packing slip and date it for the next day or 2 when the package is scheduled to arrive. Then its like net 30 from when they receive the product.
That's more or less why I started this thread. They only write checks on Fridays. I'm not sure what that has to do with us getting paid 25 days late, but whatever.

I take a lot of pride in what we do, and to make a very difficult set of prototypes that will be used to test the beginnings of a very large multi-year contract for them, all on a very tight timeline, just to get paid a month late, is pretty tough to swallow. I'm tempted to put them on COD, but that multi-year contract will be using parts that we make, so I have to hold my tongue.
As much as I am happy to have commercial customers, at the same time I'm gratefull for some retail ones as well. The retail jobs don't leave until I see the color of their money.

Helps bring those all-important funds in whilst waiting for the others to pay their frigging bill!
It's frustrating when customers don't pay on time. I have a few good ones that pay on time but most pay 15-20 days late. I just keep an eye on the running total for that customer. If they have more outstanding than I'm comfortable with they get a reminder and if it's still not paid I'll speak to the project coordinator I deal with and that usually gets the job done. Persistent offenders see a PITA tax on future orders and my willingness to slot them in because they forgot to order on time go down substantially.

I've found just leaving them to it for the most part works for me. I've wasted too much time chasing invoices etc and I can't be dealing with it other than sending statements direct from Quickbooks at the end of the month (takes about 5 mins to send one out to any customer with an outstanding invoice). That being said the vast majority of my customers I have a generally good working relationship with and I know I will get paid, it'll just be on their terms not mine. Newer customers I keep a slightly closer eye on.
NET 30 means you have payment in hand by 30 days after the invoice.

As others have alluded to, it's not a huge deal on a thousand dollars of parts if people stretch it to 30 days before they think about paying + next check run + a week to get to you. That's pretty standard.

But it absolutely sucks when customers do that sort of thing on scheduled progress payments on a large project. We had a deal that was structured such that we were not allowed to invoice the ongoing work on a project until it was done. But they they agreed to hard NET 30 terms. Payment in hand within 30 days of invoice. I repeatedly had to shut down a project down and put it behind schedule because of the customer's accounts payable people just refusing to acknowledge that they had to pay an invoice within terms.

Long story short, if you watch actual NET 30 payments you are going to have a heck of a time trying to get the customer's bean counters to understand what NET 30 is and stick to it.
Yeah? You would walk away from a multi-year blanket order that will keep two machines busy at $250/hr for the entire duration of the PO? Because I can assure you, no company capable of an order like that will accept COD terms.

That's the game I'm playing. It really sucks to have to hound a company to get paid, and it feels downright disrespectful. But there's no getting around it, apparently.
Are these complaints only a current thing? Or, did you have the same problem in years past?

I guess I was lucky I only had one customer in 35 years who was mucho late. After almost 90 days I'd had it with their promises they'd pay. Turned them over to a collection agency. And of all the dumb luck as soon as I hung up the phone the mailman brought the check for the total amount, just over $1K. 30% had to go to the collection people. Customer had no idea I talked with the collection people.
I think convention is one day after the invoice is received or after parts are received. (whichever is later)
Sometimes even though the invoice comes by snail mail it gets here a day or two before the parts.
To some places it is the check run date after the 30 has expired
In the big customer game there is no 30 anymore. (Thank you Jack Welch) ... 2nd day of 2nd month. Miss by one day and wait another month.
One talks to the customer to understand how they process stuff and pay.

There is the "interest charge" on late thing. Good luck collecting this fee from any size shop.
I do not know anyone who will accept CODs including me.
I do have newer vendors setup for immediate credit card payments. They add a two to five percent extra on top for credit card processing.
It varies. Some think net 30 is 45 days okay and 60 the hard oh-shit limit.
I have been there on both ends
For cash flow purposes one needs to know the rules inside the customer's AP system.
I have customers that are -2% ten, net 30. Sometimes they take that 2, other times they cut a check right at 30 or maybe 60+
I have others that are net 30 and pay in 1-2 weeks. If they do that a lot they will get the better terms after some history.

How hard can you push someone like MC-Master or Graingers before you get that nasty note. BTDT
I know nobody pays attention but it will hit your D&B rating.

Talk to the customer, get a good grasp on how these things are processed by the clerks who just punch it into the computer.

Interesting here is somebody who make automobiles.
Their purposed deal was weekly payments on finished cars and trucks off the line. The paint people where fine with it.
I can understand the concept. Deal is in some cases that you now become the banker like it or not.
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The way I understood it, "Net30" starts upon receiving the invoice.
Most of my customers pay somewhere within the 30 and a few pay later - usually around 45.
Anyone who goes later than that, and I have (thankfully) only a few, see an increase in my rates to cover the delays.
Total non payers are COD.
The way I understood it, "Net30" starts upon receiving the invoice.
Most of my customers pay somewhere within the 30 and a few pay later - usually around 45.
Anyone who goes later than that, and I have (thankfully) only a few, see an increase in my rates to cover the delays.
Total non payers are COD.
For us, Net 30 starts the minute the invoice is emailed to the customer. FOB is the shipping point (your dock) Hopefully, your customer has a FedEx, UPS, or common carrier account number so the transpo cost is on theirs. If you ship FedEx or UPS on your account, make sure you add something, like $5.00 (or more) to the actual shipping charge. As far as the back end of the transactions, actually getting paid, be vigilant. With EFT/ACH there is no “lost in the mail”. There is however the invoice that was never emailed (doh!) or mistakenly trashed or in the spam folder on their end. It happens and if you don’t stay on top of it, your cash flow can take a hit. If late pay is a regular occurrence, like Doug said, price increases are the way to go. You worked hard to figure out the job, no sense getting all worked up about not getting paid other than a subtle bump up in price.