The 30-60-90 Strategy: Redesigning Payment Terms Without Losing Customers

Making a sale is only the first step. The real test comes in the gap between invoicing and getting paid. This is where payment terms quietly shape cash flow.

Most finance teams encounter the issue during receivables reviews. Some customers pay in 30 days, others in 60, and a few operate on even longer cycles. These terms rarely follow a clear policy. They accumulate over time through negotiations, exceptions, and commercial pressure.

At that point, companies face one critical question: how should payment terms be structured to improve cash flow without damaging customer relationships? This article examines how businesses approach that question methodically, rethinking payment terms in a structured way rather than relying on blanket rules or one-size-fits-all decisions.

What is 30-60-90 strategy

The 30-60-90 strategy is a way of structuring payment terms across different customer groups, instead of applying a single standard term to everyone.

Rather than defaulting all customers to one net period, companies deliberately use:

• Net 30 for customers where faster cash collection is reasonable

• Net 60 where commercial scale or relationship depth justifies flexibility

• Net 90 where longer internal approval or procurement cycles are unavoidable

The numbers reflect the strategy and intent guiding them.

In practice, the strategy reflects a recognition that customers differ in size, behavior, margins, and strategic importance and payment terms should reflect those differences.

Why companies need to rethink their payment terms

Recent corporate credit analysis shows that global Days Sales Outstanding (DSO) increased by roughly two days in 2024, with receivables identified as the primary driver behind the rebound in working capital requirements.

Supporting this, a separate analysis of large listed firms found that 67% of S&P 1500 companies reported longer DSO, indicating that delayed cash conversion is now a broad-based pattern rather than an isolated issue.

For finance leaders, this matters because small movements in DSO compound quickly. A one- or two-day delay in collections can materially affect liquidity planning, borrowing needs, and cash forecasting accuracy, especially in businesses operating with thin buffers or high growth ambitions.

Advisory firms have also noted a change in CFO priorities. Working capital efficiency has moved higher on the agenda as companies navigate:

• Persistent inflationary pressures

• Supply chain normalization that still carries operational friction

• A financing environment where capital is more selective and cost-sensitive

This is why payment terms should be designed deliberately rather than applied reactively. The question shifts from “How fast can we collect?” to “How should payment terms be designed so cash flow, customer relationships, and commercial reality stay aligned?”

How to Segment Customers Using the 30-60-90 Payment Strategy

Customers affect cash flow in different ways. Some pay reliably, some have longer internal approval cycles, and others hold significant leverage due to their size or strategic importance.

To manage these differences without creating friction, companies segment customers when assigning payment terms. Segmentation ensures that terms reflect customer behavior, value, and risk, rather than applying one rule to everyone.

The following factors are commonly used to determine where each customer fits in the 30-60-90 framework: size and bargaining power, revenue and margin, payment history and credit risk, strategic importance, and industry norms.

Segment by Customer Size and Bargaining Power

Customer size and bargaining power are critical factors in determining payment terms. Large accounts often have extended procurement cycles and greater negotiation leverage. Assigning them standard terms without consideration can strain relationships and reduce revenue predictability. Smaller accounts, by contrast, have less leverage and usually accept standard terms, making them easier to manage for cash flow stability.

Segmenting customers along these lines allows finance teams to:

• Align payment terms with the relative influence of each customer on cash flow

• Reduce disputes and friction with key accounts

• Protect working capital without unnecessarily restricting strategic relationships
  
  
  

Segment by Revenue Contribution and Margin Profile

A customer’s revenue contribution and margin profile indicate the level of risk their payment behavior poses to the business. High-revenue, low-margin customers may generate volume but tie up significant cash, while smaller, high-margin accounts offer more liquidity per unit of revenue.

Segmenting customers using these factors allows finance teams to:

• Prioritize cash collection efforts on accounts that impact liquidity the most

• Adjust payment terms to balance cash flow and profitability

• Avoid overextending credit to accounts that offer low financial return but high working capital riskSegment by Payment Behavior and Credit Risk

  
  
  

Historical payment behavior is a strong predictor of future cash flow reliability. Customers who routinely pay late, dispute invoices, or consistently exceed agreed terms pose higher working capital risk. Ignoring these patterns can undermine the effectiveness of any 30-60-90 framework.

Segmenting by behavior and risk enables finance teams to:

• Adjust payment terms based on actual payment history, not just contract terms

• Reduce exposure to late payments and disputes

• Prioritize monitoring and collections resources efficiently

  
  
  

Segment by Industry Norms and Market Expectations

Payment behavior is influenced by industry standards and market conventions. Some sectors routinely operate on longer cycles due to procurement processes, regulatory approvals, or typical contract structures. Ignoring these norms can either strain customer relationships or unnecessarily restrict cash flow.

Segmenting customers with industry context allows finance teams to:

• Align payment terms with expected norms, reducing friction and disputes

• Maintain competitiveness without compromising liquidity

• Adjust internal policies to reflect sector-specific cash conversion realities

  
  

  
  

By incorporating industry norms, companies can ensure that the 30-60-90 payment framework remains realistic, commercially acceptable, and operationally enforceable, rather than relying solely on internal assumptions.

Conclusion

Structuring new payment terms using the 30-60-90 model ties together cash flow, risk, and customer relationships in an organized and analytical manner. The ability to differentiate based on business-size, revenue, behavior, business importance, and industry provides predictable cash flow without compromising high-value customers.

CFO Bridge helps businesses implement these strategies by:

• Evaluating your clientele and payment behavior to derive optimal payment terms

• Development of a 30-60-90 framework specific to the goals of working capital management

• Tracking & tweaking the terms in response to changing market or consumer trends

Next step: Reach out to our experts for assessment and optimization of your receivables and cash flow.