Extended Payment Terms

Extended payment terms allow buyers to delay payment for goods or services beyond the standard payment period agreed upon with suppliers. Instead of immediate payment, buyers receive additional time to settle accounts, typically in the form of net 30, net 60, or net 90 days. These terms are negotiated between buyers and suppliers and help buyers manage cash flow by deferring payment obligations and preserving liquidity.

The extended payment terms agreement is typically between the buyer and an external financier, which allows the buyer to extend payment for a fee. This is commonly structured through a reverse factoring program, where the financier pays the supplier early and the buyer repays the financier on the extended due date.