The terms trap: when a big customer stretches your payment terms, you fund their float

When a large customer asks to move from net-30 to net-60, it rarely feels like a negotiation. It shows up as a polite note from procurement, framed as a routine "standardization of terms." You sign, because the account matters and pushing back feels risky. But that quiet change moves real money — yours — onto their balance sheet, and it starts every future invoice a month closer to the point where it stops being collectible.

The squeeze, in the data

This isn't a feeling; it's a documented shift. The Hackett Group's 2025 U.S. Working Capital Survey, which analyzes the 1,000 largest U.S. public nonfinancial companies, found those companies pushed their days payable outstanding (DPO) to 59 days — meaning the biggest buyers now take roughly two months, on average, to pay what they owe. The survey was direct about the mechanism on the other side of the ledger: days sales outstanding "saw its second straight year of degradation, as customer bargaining power drove extended payment terms."

In plain English, large buyers are using their leverage to pay slower, and their suppliers are absorbing the difference. Hackett put the total pool of trapped cash across those companies at roughly $1.7 trillion, including about $600 billion tied up in receivables — money that isn't lost, just stuck in the gap between when work was delivered and when it gets paid.

Why "just net-60" costs more than 30 extra days

On paper, extending terms looks like a scheduling tweak. In practice it does three things at once. First, it makes you the lender: for those extra 30 days, your cash is financing the customer's operations instead of your own. Second, it travels downstream. Intuit QuickBooks' 2026 Small Business Late Payments Report found that 42% of small businesses said outside pressures had, in the prior quarter, delayed the payments they in turn owed their own contractors, suppliers, and vendors. When one big account stretches, the strain rarely stops with you.

Third — and this is the part owners underestimate — a longer term resets the clock on collectibility. A net-60 invoice that goes just 30 days late is already 90 days out from the work being done. The collectible value of a past-due invoice erodes the longer it ages, so terms that start later leave you far less runway before an overdue balance slides into the zone where recovery gets genuinely hard.

The average that hides the damage

Averages are comforting and misleading. QuickBooks found that small businesses waiting on invoices are owed about $17.7K at any given time — roughly flat from a year earlier — while 59% now carry invoices more than 30 days past due. A business can still hit its target DSO on average while a few large, long-term accounts quietly sit at the far end of the aging report. Those are precisely the invoices that extended terms create: big, slow-moving, and easy to leave alone because the customer is "good for it." Good for it, eventually, is not the same as paid.

What to do before you sign — and after

You can't always refuse a major customer's terms. What you can change is the instinct to treat the due date as the moment to finally start paying attention. If an account is on net-60, the pre-collections window — roughly 30 to 120 days past due — opens later and closes just as quickly, which means your follow-up has to be earlier and sharper, not more patient.

That's a different discipline than firing another automated reminder into an inbox. It means knowing which accounts are on extended terms, watching those specifically, and reaching the right person with a clear, professional signal the moment an invoice ages past due — while it's still worth close to full value, and well before anyone hands it to a collection agency and its contingency cut. The businesses that come through longer terms intact aren't the most patient ones. They're the ones who treat every extra day of terms as exactly what it is: their money, on someone else's schedule.