Net-terms-as-a-service is a financial solution designed to help businesses extend payment terms (such as Net 30, 60, or 90 days) to their customers without having to take on the associated cash flow or credit risk. This service acts as a modern alternative to factoring and in-house credit management.

How Net-Terms-as-a-Service Works:

  1. Credit Evaluation: The service provider evaluates the creditworthiness of your customers in real-time, determining how much credit you can safely offer and for how long.
  2. Immediate Payment: Once an invoice is approved, the service provider pays you a percentage of the invoice (typically within 1 day), so you don’t have to wait for the customer to pay.
  3. Customer Payment: The customer pays the service provider later based on the agreed net terms (e.g., 30, 60, or 90 days).
  4. Risk Management: The service handles the risk of delayed or non-payment, often taking over the collections process if needed.

Benefits:

  • Cash Flow Improvement: You get paid almost immediately after issuing an invoice, improving your cash flow.
  • Lower Costs: Net-terms-as-a-service tends to have lower fees than factoring or trade credit insurance, as it focuses on credit risk management rather than full receivables purchase.
  • Customer Relationship Preservation: This solution operates in the background, allowing you to maintain control of your customer relationships without the need for a third party to intervene aggressively.
  • Automation: Many providers offer integrations with your accounting system, automating tasks like payment reminders, invoicing, and collections.

Ideal for:

  • Businesses that sell to other businesses (B2B) and offer payment terms.
  • Companies seeking to extend payment flexibility to their customers without damaging cash flow.
  • Businesses with significant amounts of capital tied up in unpaid invoices but want to avoid factoring costs.

A leading company offering this service is Resolve, which helps businesses manage net terms and ensures cash flow security by advancing payments on invoices while they handle the credit risk and collection(

Resolve Pay

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Resolve Pay

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