Net Terms Approval Before You Invoice B2B: Credit Risk Made Operational

Net-60 is a loan, not a sales perk

When a brand agrees to invoice a wholesale buyer on Net-60, the brand is effectively lending working capital for two months. Treat it like sales courtesy and you take all the risk; treat it like credit and you have an operational checklist that prevents the predictable bad-debt cycle.

The credit decision broken into operational steps

1. Identity check. Verify the business legally exists, with current registration, VAT ID, and address.
2. Credit signal. Pull a credit score or trade reference; for international buyers, a recent bank reference.
3. History check. Internal: prior orders, payment patterns, complaints, returns.
4. Limit calculation. Set a credit limit per customer; deny orders above it without re-approval.
5. Term assignment. Match the term to the risk: Net-15 for new, Net-30 for proven, Net-60+ only with finance approval.

Approval matrix for Net terms

• Net-15: first three orders auto-approve up to small limits.
• Net-30: approved by RevOps for accounts with two or more on-time payments.
• Net-60: Finance approval; credit signal required.
• Net-90+: Founder/Finance sign-off; written contract addendum.

Triggers that should freeze invoicing automatically

• Customer has an open invoice past due more than 15 days.
• Customer is over the credit limit even before the new order is approved.
• Customer's country shows new sanction or trade restriction.
• Bank reference is older than 12 months for high-value customers.

What the approval card should show

1. Customer name, tier, total open AR.
2. Days sales outstanding (DSO) trend.
3. This order's value and discount.
4. Requested term vs. policy default for this tier.
5. One-click Approve / Reject / Request more info.

What gets logged for audit

• Approver identity, timestamp, decision, reason.
• Credit signals used at decision time (pulled fresh, not cached forever).
• Resulting term assigned, even if different from requested.
• Notifications sent (rep, customer, finance).

Collections is the other half

Approval prevents one failure mode (bad credit decision). Collections handles the other (good decision, late payment). Set automated dunning at day 0 (gentle reminder), day 7 (firm), day 15 (escalate), day 30 (block new orders). Tie this loop back into the approval system so a chronic late payer cannot bypass the queue next time.

Metrics that prove the system works

• DSO trend across the portfolio.
• Bad-debt write-off as a percentage of B2B revenue.
• Approval cycle time per tier.
• Override rate (founder overrides RevOps decisions)—should trend toward zero.

Where GateFlow fits

GateFlow routes Net-30+ draft orders into a Finance approval queue with the credit context above, blocks invoicing for customers with overdue AR, and writes the full audit trail to Shopify admin. Learn more and operationalize your credit policy.