If you’re offering B2B payment terms to your customers — Net 30, Net 60, or anything in between — there’s a cost sitting in your receivables right now that doesn’t show up on any invoice and almost nobody in B2B ever talks about.
Let me ask you three questions.
When do your customers actually pay — do they hit your due date, or does it run to day 40, 45, sometimes 60?
And have you ever calculated what it costs you to carry those receivables while you’re waiting?
If the answer to that last question is no — keep reading. Because there’s a hidden expense in your business that’s been draining your cash flow for years. It’s called float cost. And for most B2B suppliers, it’s one of the largest costs they’ve never measured.
Why B2B Payment Terms Are Costing You More Than You Think
Here’s a simple way to think about it.
Every time you ship goods or deliver a service and send an invoice, you’ve made an interest-free loan to your customer. You paid your staff, your suppliers, your rent. And now you’re waiting 30, 45, sometimes 60 days to get your money back — with zero interest charged.
If a stranger walked up to you today and said ‘I want to borrow $500,000 from your business for 45 days, interest free’ — you’d say no immediately. But that’s exactly what you’re doing for your customers every single month. The only difference is you’ve been doing it so long it feels normal.
It’s not normal. It’s expensive. And most suppliers have never quantified it.
The Math Nobody Shows You
Here’s how to calculate what your payment terms are actually costing you. It uses a simple formula called the Time Value of Money:
THE FORMULA
Cost of Capital (WACC) ÷ 365 × Days Outstanding = % Cost Per Day
Example: 8.25% ÷ 365 × 45 days = 1.02% of your outstanding receivables
On $3 million in annual revenue collecting at day 45:
$3,000,000 × 1.02% = $30,600 per year — invisible, unpaid, gone.
That is what you are paying every year just to finance your customers.
Now compare that to card acceptance at Net 10 or Net 15. Card at 2.5% on $3 million costs $75,000 in fees — but you get paid in days, not weeks. The float savings alone offsets a significant portion of that fee. The net cost of card, properly structured, is far lower than most suppliers think.
Why Card Feels Expensive — And Why That Feeling Is Wrong
The most common thing I hear from suppliers reviewing their B2B payment terms is: card costs too much. And I understand why. They see a 2.5% processing fee and compare it to zero — because ACH and checks feel free.
But ACH and checks aren’t free.
The real cost of a check — labor, printing, postage, bank fees, processing time — runs anywhere from $4 to $20 per transaction. And that’s before you account for the float cost of waiting 45 days to collect.
The mistake isn’t taking card. The mistake is taking card at the wrong time — accepting it at day 45 with no specific policy. That’s where suppliers pay card fees AND eat the full float cost. They get all the cost with none of the benefit.
THE REFRAME
Comparing card fees to nothing is the wrong comparison.
The right comparison is card fee at Net 10 versus float cost at day 45.
When you run that comparison — card often wins.
The One Change That Changes Everything
I recently worked with a large auto parts distributor in the Southeast. They were offering Net 30 terms, collecting at day 40-45, and accepting card whenever buyers happened to pay. They thought card was expensive. They were considering surcharging.
We made one change: Net 15 on card. No exceptions. No variances. If you want to pay by card, the terms are Net 15.
What happened? Their buyers — most of whom had corporate card programs with rebate — showed up at Net 15 every time. Because paying at Net 15 by card means they earn their rebate. Paying at day 45 by ACH means they earn nothing. The math is obvious for a buyer with a rebate program.
The supplier went from hating card to taking it from anybody. Same fee. Completely different result. Because the policy changed.
What You Should Do Next
If you’re currently offering B2B payment terms and either not accepting credit card, accepting it too late, or surcharging to offset the cost — there’s a good chance you’re leaving money on the table in two ways simultaneously.
• You’re financing your customers’ operations interest free while paying your own bills monthly.
• Your buyers with corporate card programs are either not using their card with you or paying a surcharge that wipes out their rebate.
• You’re comparing card fees to nothing instead of comparing them to your actual float cost.
The fix isn’t complicated. Set a card-specific payment term, remove the surcharge, and let buyer behavior do the rest. Buyers who want their rebate will show up early. You get paid faster. Your card volume increases. And the net cost of card — after float savings — becomes surprisingly manageable.
Three Questions to Ask Yourself Today
- What is your actual DSO — not your stated terms, but the day you actually receive payment on average?
- Have you ever calculated what it costs you to carry your receivables at that DSO?
- Do you know what percentage of your buyers have corporate card programs they’d like to use with you?
If you don’t know the answers — or the answers surprise you — it’s worth a 20-minute conversation. I run a free analysis that shows exactly what your current payment structure is costing you and what an accelerated card program would look like for your specific numbers.
No pitch. Just math.
Contact Sean Jones at Revolution Payments: sean@ revolution-payments.com www.revolution-payments.com
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About the Author: Sean Jones is the founder of Revolution Payments, a B2B payments specializing in payment acceleration, commercial card acceptance, and working capital optimization. Sean helps mid-size B2B suppliers reduce DSO, increase card volume, and improve cash flow through smarter payment policy.