For decades, “Net 30” or “Net 60” terms have been the unwritten rule of wholesale trade. Suppliers extended generous credit to keep orders flowing and relationships strong.
But in 2025, the rules are changing. Rising interest rates, retail collapses, and unpredictable supply chain costs have forced wholesalers to take a hard look at their credit terms. What once felt like the cost of doing business is now one of the biggest risks to staying afloat.
Why credit terms are under pressure in 2025
1. Higher interest rates = higher carrying costs
Over the past two years, borrowing costs have surged. For suppliers, that means funding longer credit cycles is more expensive. Every additional week of receivables is tying up working capital that could have been used to purchase stock or secure supplier discounts.
2. Retail collapses are rising
From construction suppliers to specialty retailers, insolvency rates have spiked across Australia and New Zealand. In Australia, CreditorWatch reported near-record B2B defaults in late 2024, while New Zealand SMEs lost NZ$827m in 2023 to late payments alone.
Every collapse leaves suppliers holding unpaid invoices, and longer credit terms only magnify the exposure.
3. Supply chain costs are unpredictable
Shipping delays, raw material shortages, and higher logistics costs are still squeezing margins. The last thing a wholesaler needs is to deliver stock at a thin margin and then wait 60+ days to get paid.
The shift: from “longer terms” to “smarter terms”
The market reality is clear: generous credit is no longer sustainable. Suppliers are re-thinking how they extend terms, and it’s not just about saying “no”—it’s about being strategic.
Here’s how forward-thinking wholesalers are adapting:
Reducing terms
Instead of Net 60 or Net 90, suppliers are shortening to Net 30—or even Net 14—for certain accounts. This keeps the cash cycle tighter while still offering flexibility.
Requiring deposits
Deposits of 20–50% are becoming standard for large or custom orders. This ensures suppliers aren’t left fully exposed if a customer defaults or delays.
Securing payments up front
Rather than waiting until an invoice is overdue, wholesalers are capturing payment details during onboarding. That way, they can automatically debit when invoices fall due, or even bill on dispatch.
Offering structured payment plans
Instead of writing off bad debts, suppliers are turning late payers into paying customers by offering automated instalments—transforming a risky receivable into predictable cash flow.
How PencilPay makes change possible (without losing customers)
Traditionally, tightening credit terms came with a fear: “If we don’t give longer terms, our customers will go elsewhere.”
PencilPay helps suppliers protect cash flow without alienating buyers:
- Branded digital credit apps make onboarding smooth, while automatically screening risk and capturing payment methods.
- Risk-based terms allow wholesalers to tailor credit by customer profile (deposit for new accounts, extended terms for proven payers).
- Auto-billing and reminders ensure invoices are collected on time, reducing chasing and manual admin.
- Instalment plans turn overdue accounts into scheduled, automated payments—helping maintain relationships while still collecting cash.
- ERP/accounting integrations keep everything synced with MYOB, Cin7 Core, and others, so finance teams aren’t left reconciling manually.
With PencilPay, suppliers don’t need to choose between protecting their business and keeping customers happy—they can do both.
Bottom line
The economy in 2025 is high-risk: interest rates remain elevated, insolvencies are climbing, and costs are unpredictable. Wholesalers can’t afford to hand out long credit terms just to keep orders flowing.
Instead, they’re re-thinking credit—shorter terms, deposits, secured payments, and automation.
With PencilPay, those changes don’t mean lost sales. They mean stronger cash flow, lower risk, and healthier customer relationships.
Because in a high-risk economy, smarter credit terms aren’t optional—they’re survival.