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Net terms

The agreement that a business customer pays the full invoice a set number of days after a set date: net 30 is 30 days from the invoice date. The terms sit on the account, print on every invoice, and set how old a balance is on the statement.

A retail customer pays at the counter. A fleet pays on terms, and the terms are the first number to agree. In an AutoShopOwner thread on fleet billing, one owner said "payment terms in our area are typically between 30 to 60 days", another that "NET30 is pretty typical around here", and the shop asking the question already did net 30 with its other fleets. An owner in an AutoShopOwner thread on fleet billing warned that one government customer would not accept late fees and paid when it got to it, which is the reason the terms get agreed before the first job and not after the first late invoice. Elon Block's piece on the same site puts the cause of most fleet credit trouble at "accounts set up incorrectly".

Due date = the start date (invoice date, or delivery date if agreed) + the net days

Two details decide more than the number of days. Which date the clock starts from, because an invoice dated the day the truck left and one dated at month end are a month apart. And what happens past the due date, which is either agreed in writing or does not exist.

Terms belong on the account, not on the job: every invoice for that customer prints them, and the statement ages the balance from them. The purchase order number is the other field on the same account, and the fleet account terms post has the full list.

In Wrenchy the terms are a field on the business account, and receivables age in buckets with statements by email.

Sources (2)

  • Tire identification number

    The number moulded into a new tire's sidewall under 49 CFR 574.5: thirteen symbols in three groups, a plant code, a manufacturer's code and a four-digit date code giving the week and year of manufacture.

  • Purchase order number

    The reference a business customer issues to authorize a purchase, which its accounts office uses to match the shop's invoice before paying it.

  • Fleet account terms

    Shop owners who do fleet work say the same three things: the fleet wants your standard PM prices up front, terms run net 30 to 60, and a slow payer sets its own pace. The list to agree before the first purchase order, and what each item becomes on the invoice.

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