What are the payment terms for orders under $2,500?

The correct answer, Net 30, indicates that for orders under $2,500, the payment is due 30 days after the invoice date. This payment term provides customers with a grace period to manage their cash flow and make the payment after receiving the product and invoice. It is a common practice in sales as it helps to establish trust and build a good relationship with clients, allowing them to verify the expertise of the company and the quality of the goods or services provided before requiring immediate payment.

Offering terms like Net 30 can make purchases more appealing for customers, as it aligns with many business cash flow cycles. This flexibility can lead to repeat business, as clients appreciate the leniency in payment schedules, especially when dealing with smaller order amounts.

While payment options such as due upon receipt requiring immediate payment may apply in certain situations, they generally do not offer the same level of convenience that longer terms provide for smaller transactions. Similarly, COD (Cash on Delivery) requires payment upon delivery, which might not be practical for all transactions. Net 15 also shortens the payment period unnecessarily, which may not be ideal for fostering long-term customer relationships.