Granting payment terms without weakening your cash flow

A customer asks to pay at thirty days. You agree, because refusing feels hostile. You have just granted credit: from your own funds, interest-free, unsecured, and without checking whether you could afford it. That is not a neutral commercial gesture, it is a financing decision.

1. What terms actually cost

The cost of terms is invisible, because it never leaves an account. It can be measured all the same, exactly like financing.

1. Take the amount you are leaving outstanding with that customer.
2. Multiply by the number of days of credit granted.
3. Relate it to the cost of your own funding over the same period.
4. Add the risk: some of those receivables will never come in.
5. Add the time spent chasing, which is a real cost even though it is never invoiced.

The fourth line is the one people omit, and the most expensive. Terms granted to a customer who pays are a cash cost; the same terms granted to one who will not pay are an outright loss, on top of goods already delivered.

---

2. The real risk is the accumulation

A single invoice at thirty days puts nobody in difficulty. It is the total that causes the problem, and it builds up with no conscious decision.

Situation	What it represents	What to look at
One customer at 30 days	A month of their turnover tied up	The amount, once
Ten customers at 30 days	A month of that turnover tied up permanently	Total exposure, not the invoice
One customer at 90 days	Three months of their turnover tied up	The duration as much as the amount
A customer who always overruns	A real term longer than the one granted	The observed term, not the agreed one

The last line misleads most. The term that counts is not the one printed on the invoice but the one the customer actually applies. A “thirty-day” customer who consistently pays at fifty is a fifty-day customer, and that is the figure to manage with, as receivables control shows.

3. Set the limit before selling

The decision is taken once, calmly, and then applies without being re-argued at every order — which is precisely what makes it hold.

1. Determine the total you can leave outstanding without hampering the business.
2. Split it into a maximum exposure per customer, by weight and by history.
3. Write the rule: beyond that exposure, the next order is paid in cash.
4. Set a maximum term as well, separate from the amount: the two limits are independent.
5. Decide who can make an exception, and on what basis — or the rule dies at the first hard case.
6. Check the exposure before accepting the order, not at the chasing stage.

The fifth line determines whether the rule survives. A limit with no exception procedure will be worked around quietly; a limit with a named, recorded exception remains a limit, even when it is exceeded.

4. Declining without losing the sale

Between granting thirty days and demanding cash there is a range of intermediate positions that many businesses never use.

• A deposit: A part paid on order reduces both exposure and cancellation risk. It is the simplest middle position, covered in deposit or earnest money.
• A shorter term: Fifteen days instead of thirty halves the exposure without refusing the principle of credit.
• A cap per order: You grant the terms, but beyond an amount the excess is settled in cash.
• A discount for early payment: You leave the choice to the customer, at a known price. The economics are in settlement discounts.
• Progressive terms: A new customer starts on cash terms and earns credit after a history of payments kept.

The last line is the most useful in practice and the easiest to explain to a customer. It turns a refusal into a stage: you are not granting terms yet, which is a far easier position to hold than a flat no.

Mistakes to avoid

• Granting terms without having set a maximum exposure first.
• Planning on the agreed term rather than the observed one.
• Looking at each invoice in isolation instead of cumulative exposure.
• Treating refusal as the only alternative to acceptance.
• Allowing exceptions to the limit with no record and no named owner.
• Checking exposure at the chasing stage rather than at the order.

---

Frequently asked questions

Do payment terms really cost anything?

Yes: you fund your customer with your own cash for the whole term, interest-free. The cost is your funding cost over that period, plus the risk of non-payment and the time spent chasing.

How is a customer’s maximum exposure set?

By starting from the total you can leave outstanding without hampering the business, then splitting it by each customer’s weight and history. The limit is set before the first order, not after the first delay.

Should a customer asking for terms be refused?

Rarely in a binary way. A deposit, a shorter term, a cap per order, or terms earned progressively after a record of payments kept all preserve the sale while limiting exposure.

Which term should I use in my forecasts?

The observed term, not the agreed one. A customer who consistently pays at fifty days must be forecast at fifty, or your cash plan describes a situation that does not exist.

Does BelloPOS track customer exposure?

Customer records exist from BelloPOS Lite, and customer credit tracking arrives with Go: balances per customer and payment history, enough to measure the term actually observed before setting any limit.

What to take away

Granting terms is a financing decision, not a commercial gesture. Quantify what it costs, think in cumulative exposure rather than isolated invoices, set the limit before the order, and use the middle positions rather than refusal. And manage on the observed term, never on the one you granted.

Sources

The figures and rules quoted above come from these pages, read on the date given in the article.

• Moroccan Tax Administration, 2026 General Tax Code
• Ministry of Economy and Finance, General Code of Accounting Standardisation, read 1 September 2026

Read next

Other practical guides on the same subject:

• Tracking customer receivables and supplier payables in Morocco
• Invoice payment terms in Morocco: due dates, deposits and delay
• Early payment discounts in Morocco: calculation and whether they pay
• Doubtful customers in Morocco: provisioning a receivable at risk