Understanding NET90 Terms and Early-Pay Discounts: What You Need to Know

Recently, our company secured a significant client with a workforce of approximately 80,000 employees. While we are thrilled about this opportunity, we are facing a challenge: the client requires NET90 payment terms. This extended timeframe for payment raises concerns about our cash flow, especially since our usual practice has been to offer NET30 terms.

In light of this situation, I am contemplating whether proposing a 2% discount for payments made within 30 days would incentivize them to settle their invoice early. However, I find myself uncertain: should I anticipate that they will take advantage of this proposal?

If anyone in the community has navigated similar client relationships or worked with companies that typically follow NET90 terms, your insights would be invaluable. While I’m hesitant to share the client’s name out of caution, I would greatly appreciate any guidance or experiences you can offer.

Thank you in advance for your help!