insights
A new customer wants 60 days to pay. How can we reduce the risk before accepting?
Compare deposits, staged payments, exposure limits, credit insurance and conditional invoice-purchase commitments before accepting a new customer’s 60-day payment terms.
TL;DR
- Check the new customer's ability to pay before accepting 60-day payment terms. A credit assessment informs your decision but does not guarantee payment.
- Calculate the most you could have unpaid at once, including orders you would deliver before the first invoice comes due.
- Negotiate a deposit, smaller initial orders, milestone payments, or a limit on unpaid work if that exposure exceeds what you can carry.
- Decide which risk you will retain. Trade credit insurance can cover agreed losses under a policy. Delos Payment Protection offers a pre-invoice route to a conditional commitment to buy a qualifying invoice if the customer fails to pay. An enquiry alone provides no commitment.
Check the payer and calculate your exposure before agreeing to anything
Before accepting 60-day payment terms, check the customer you will invoice and calculate how much they could owe before you receive the first payment. Confirm the payer’s legal name and billing details, review available financial information, and ask for trade references you can verify. A credit insurer’s buyer rating can help you judge payment risk and may indicate how much exposure the insurer would cover. Atradius describes buyer ratings as a guide to due diligence, not a guarantee that the customer will pay.
Calculate exposure using the value of each order and the number of orders you expect to deliver while earlier invoices remain unpaid. If you invoice $25,000 every 30 days on 60-day terms, two invoices could total $50,000 before the first payment falls due. A third order could raise the balance to $75,000 if you release it before that payment clears. Include work already delivered but not yet invoiced, and use your busiest plausible order schedule rather than an average month.
Decide how much of that balance you can carry if payment runs late. Without a rule to stop new work or shipments at an agreed limit, the unpaid balance can keep growing after the first invoice becomes overdue.
Choose a control before you invoice
You can reduce a new customer’s 60-day payment risk by changing when cash arrives, limiting how much you leave unpaid, or arranging for someone else to bear an agreed share of a loss. You can combine these controls, but each addresses a different part of the exposure you calculated.
1. Agreed deposit
Best for: Getting cash before you start. How it works: Agree on an amount the customer pays upfront, reducing what you extend on credit. Trade-off: The customer can still miss later payments. Next step: Put the amount and due date in the contract.
2. Milestone payments
Best for: Work you can divide into payable stages. How it works: Agree when each stage becomes payable rather than leaving the full price due after completion. Trade-off: A scheduled payment reduces exposure only when the customer makes it. Next step: Define each milestone and its payment date before work begins.
3. Smaller initial orders or project phases
Best for: Testing payment behavior before delivering the full order. How it works: Deliver a smaller amount, then decide whether to continue after payment. Trade-off: You still bear the risk on work already delivered. Next step: Agree which payment must clear before the next phase starts.
4. Exposure limit
Best for: Keeping unpaid work within an amount you can carry. How it works: Set a maximum across open invoices and work in progress, and agree how any pause in new deliveries will work under your contract. Trade-off: You retain the risk within the limit. Next step: Assign someone to check the balance before each release.
5. Trade credit insurance
Best for: Seeking policy-based cover for eligible non-payment losses. How it works: The insurer sets a buyer limit and policy conditions. Trade-off: Cover depends on those limits and the terms of an eligible claim. Next step: Check the proposed buyer limit and policy wording before paying.
6. Delos Payment Protection
Best for: Seeking a pre-invoice commitment to buy a qualifying invoice if this customer does not pay. How it works: Delos says it reviews the contract before you invoice and sets the applicable terms, amount, and period. You must agree to the commitment and pay its fee. Trade-off: An enquiry alone provides no commitment, and an invoice must qualify under the agreed terms. Next step: Submit the contract for review before invoicing.
Comparing the options at a glance
Compare each option with the largest unpaid balance you could carry under 60-day payment terms. A payment schedule reduces that balance only when the customer pays.
| Option | What it changes | Risk that remains | When cash arrives | Cost or condition |
|---|---|---|---|---|
| Agreed deposit | Reduces the balance you extend on credit | Customer may miss the remainder | When the deposit is paid | Agreed amount, with no standard percentage |
| Smaller orders or phases | Limits the value delivered before the next decision | Risk of non-payment for work already delivered | As each order is paid | Requires the customer to accept staged delivery |
| Milestone payments | Splits payment across project stages | Customer may miss a milestone | When each payment is made | Agreed schedule, not guaranteed collection |
| Exposure limit | Caps new credit you permit | Unpaid amounts within the cap | When the customer pays | Agree how the cap and any pause in delivery work under the contract |
| Trade credit insurance | Covers eligible losses within policy limits | Exclusions, uncovered amounts, and claim conditions | After an eligible claim | Insurer assesses the buyer and applies policy terms |
| Conditional invoice-purchase commitment | Arranges a buyer for qualifying unpaid invoices before invoicing | Invoices outside agreed terms, limits, or period | Advance when Delos buys the invoice | Delos states an indicative 0.5 to 2% commitment fee. Purchase terms follow review |
Where Delos fits
Delos is worth considering when you want the option to sell a qualifying unpaid invoice from this customer under a commitment agreed before invoicing. You arrange the commitment before a payment problem arises, but you decide whether to offer the unpaid invoice for purchase. Delos does not advance cash when you make an enquiry or pay the commitment fee.
According to its Payment Protection page, Delos first reviews your contract before you invoice. The review covers the payer, amount, and payment terms. Delos says that if you accept its proposed commitment and pay the fee, it reserves funding for invoices that meet the agreed terms, amount, and period.
On its Payment Protection page, Delos lists an indicative commitment fee of 0.5% to 2% of invoice value. Delos confirms the actual fee and purchase terms after contract review, including any charges if it buys an invoice. If your customer pays, no invoice purchase is needed. Ask how the commitment fee is treated in that situation, including whether any refund conditions apply. If the customer does not pay, you can offer a qualifying invoice. If Delos buys the invoice, it says it advances up to 90% of the invoice value and takes ownership under the agreed terms. Confirm who handles collection and how any remaining balance is treated in the purchase agreement.
A deposit suits you better if you need cash before starting work. An exposure limit suits you if you can stop further work once unpaid balances reach an amount you can absorb. Trade credit insurance may suit you if you want indemnification for eligible losses under a policy. Delos uses a conditional purchase commitment for qualifying invoices. Compare the actual limits, period, costs, and remaining obligations.
Questions to ask before paying any provider
Before paying a provider, get written answers that refer to your customer, contract, and maximum unpaid balance.
- What event triggers payment or purchase? A credit insurer pays under its policy after an eligible loss, while Delos advances funds only if it buys a qualifying unpaid invoice.
- What does the fee buy, and which limits, periods, conditions, or additional charges apply? Ask the provider to identify the amount of risk you still carry.
- What happens if the payer disputes the invoice? Ask who handles the dispute and whether it affects payment or purchase.
- What must you do if the payer simply never pays? Confirm notice requirements, deadlines, and what happens if collection fails.
- If you sell the invoice, who owns it afterward, and what happens to any balance the advance did not cover?
Accept, renegotiate, or pause: a decision checklist
Compare your calculated maximum unpaid exposure with the amount you can afford to carry if the customer pays late or never pays.
- Accept if the payer check raises no unresolved concerns and the agreed controls keep peak exposure within your limit. Record the payment schedule, credit limit, and any right to stop further work in the contract.
- Renegotiate if peak exposure exceeds your limit but a deposit, smaller first order, or staged delivery could bring it down. Recalculate the balance before agreeing to 60-day payment terms. Do not treat a proposed insurance policy or invoice-purchase commitment as active protection.
- Pause if you cannot verify the payer, agree workable controls, or carry the remaining exposure under the terms available. Decline the 60-day request until those conditions change.
FAQ
Does a Delos enquiry protect an invoice?
No. Delos says protection requires contract review, an agreed commitment, and payment of the fee before invoicing. The invoice must also meet the agreed terms, amount, and period.
Should I ask for a deposit or use Delos?
Ask for a deposit if you need cash before starting work. Consider Delos Payment Protection if you can carry the invoice until it becomes unpaid and want the option to offer a qualifying invoice for purchase.