‘Net Never’ Terms: Delayed Payments Threaten B2B Supply Chain Stability

What’s worse than shoppers skipping out on a tab? The businesses themselves stiffing the very suppliers keeping them afloat.

After all, businesses ranging from multinational enterprises to Main Street small and medium-sized businesses (SMBs) know they must preserve their supplier ecosystems to remain competitive, yet in times of macro uncertainty firms that often rely on tight cash cycles are being squeezed to the breaking point.

This can have a deleterious downstream impact across the B2B supply chain. For example, Delicious Hospitality Group, a New York City restaurant group, recently made headlines for its growing list of non-payments to wholesalers.

“I joke that I am not a seafood provider — I’m a source of capital who offers a zero percent interest loan,” said one seafood wholesaler quoted in the report.

But it’s not just industries like food and beverage, which have traditionally operated on razor-thin margins and pressured supplier relationships, that are offloading their operational pinches further down the supply chain.

Mexico’s state-owned Petróleos Mexicanos (Pemex) has long leaned on supplier flexibility to get by — but now finds itself over $20 billion in debt. The oil group’s suppliers, many of whom have few options but to wait for payments from Pemex to come in, are increasingly finding themselves facing either insolvency or severe cost-cutting.

A single delayed invoice from a dominant buyer can cripple a supplier’s working capital. And while large corporations enjoy favorable credit terms from banks, smaller vendors face higher borrowing costs, making the delay even more punitive.

See also: Better DPO Management Emerges as Key Outcome of Working Capital Efficiency

The Mechanics of Delay

In B2B transactions, standard payment terms are typically net 30, meaning payment is due within 30 days of invoicing. But over the past decade, it’s become increasingly common for large companies to demand net 60, net 90, or even net 120 terms. Some firms delay payment even further, citing internal bureaucracy or disputes over delivery quality. Others simply ignore due dates, knowing smaller suppliers lack the leverage to protest.

Industry insiders now joke about “net never” terms — a grim twist on the traditional net 30 payment standard. Some are turning to invoice factoring, others to collections firms. But many are simply fed up.

It was reported not long ago that, in the midst of its merger with Neiman Marcus, the retailer Saks owed vendors hundreds of thousands of dollars each.

“Companies get in trouble in cycles like this, especially if they’re thinly capitalized,” Ingo Payments CEO Drew Edwards told PYMNTS.

The situation is potentially emblematic of a broader issue: the power imbalance between suppliers and buyers. In industries where a few buyers control large portions of the market, suppliers are often at their mercy. Delays in payment create a domino effect, and if a tier-one supplier can’t pay a tier-two vendor, and so on down the line, the whole chain becomes vulnerable.

Small to medium-sized suppliers that often rely on tight cash cycles are being squeezed to the breaking point. Many can’t afford the legal battle to collect, and banks are reluctant to extend credit on invoices that may never pay out.

Research by PYMNTS Intelligence has found that nearly 20% of SMBs are pessimistic about their odds of surviving the next five years.

Read also: B2B Marketplaces Offer Buyers and Suppliers New Procurement Playbook

Working Capital’s Role

The marketplace is not standing still while businesses continue to get stiffed. Working capital innovations and B2B payment tools such as virtual cards have emerged as key strategies not just to keep the lights on, but to invest in a more robust growth roadmap.

“What we’re seeing, not just on the small business front but also with larger companies, is the utilization of credit products to extend working capital … to optimize spending on their suppliers and buy items they might need in bulk or purchase large-ticket items,” Priority CEO Tom Priore told PYMNTS.

At its core, working capital management involves balancing current assets and liabilities to ensure a company can meet its short-term obligations. But done strategically, it goes beyond basic liquidity management. It becomes a tool to build resilience, strengthen supplier relationships, and even drive competitive advantage.

“A payment might be due in 30 days, but the buyer might typically pay in 45 or 60,” Boost Payment Solutions CEO Dean Leavitt told PYMNTS last month. “If suppliers can get paid at day 30 for agreeing to accept commercial cards or other digital solutions, they do it. That gives them a working capital advantage.”

At the same time, modern treasury tools now leverage artificial intelligence (AI) and machine learning to forecast cash flow with high accuracy. These platforms integrate data across accounts receivable (AR), accounts payable (AP) and inventory to provide real-time insights, and firms can increasingly turn to predictive analytics to identify seasonal cash shortfalls months in advance, enabling them to negotiate better terms with suppliers and avoid delays.

After all, not all vendors are created equal. Leading firms are now segmenting suppliers based on strategic value and financial fragility. This enables them to tailor payment terms and avoid a one-size-fits-all approach.

The good news is that with the right working capital strategies, the same practices that once caused conflict can foster collaboration. By integrating technology, aligning internal teams and focusing on mutual benefit, companies can turn payables into a point of strength rather than friction.

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