Trade credit — the gap between when a B2B buyer receives goods and when they pay for them — is where a significant amount of real operational risk lives in distribution businesses. It doesn’t show up in the P&L until something breaks. And in 2026, the conditions under which things break have shifted.
This post covers what’s changing in B2B trade credit terms, why days sales outstanding (DSO) is rising in several categories, and what importers with cross-currency supply chains should be thinking about.
Why DSO Is Rising
DSO measures how many days, on average, it takes a business to collect payment after a sale. It’s a lagging indicator of credit risk and customer health. When DSO creeps up, it means buyers are taking longer to pay — which may reflect cash pressure on their side, changed payment behavior, or renegotiated terms.
In B2B distribution, DSO has been rising in 2025–2026 for several reasons:
Buyer-side liquidity pressure. Higher interest rates through 2023–2024 tightened credit availability for mid-market buyers. Many distributors’ customers are carrying higher debt costs and managing cash more carefully. One result: slower payment on open credit terms.
Supplier-side concessions. To maintain volume, distributors have been extending terms — moving from net-30 to net-45 or net-60 for key accounts. These concessions aren’t always tracked explicitly; they accumulate informally through one-off arrangements that become de facto standard.
Emerging market complexity. For importers working with Iranian suppliers, trade credit on the supply side is often structured differently than European norms: advance payment, letter of credit, or short-term open credit with personal guarantees is common. The gap between “I paid my supplier in advance” and “my customer pays me in 60 days” creates a working capital hole that is often underestimated.
The Cross-Currency Cash Flow Problem
For an EU importer with an Iranian supplier and European buyers, the cash flow timeline often looks like this:
- Day 0: Pay supplier advance (USD or EUR)
- Day 30–60: Goods arrive and are received
- Day 30–90: Customer invoiced after delivery
- Day 60–150: Customer pays (net-30 to net-60 from invoice)
The working capital cycle — from outflow to inflow — can run 60–150 days. During that window, the importer is carrying FX exposure on the unrealized EUR value of goods they’ve already paid for in USD. If EUR/USD moves unfavorably during the holding period, the margin on those goods erodes before the sale is even complete.
The fix is simple to describe and harder to execute: match payment currency to revenue currency, and shorten the collection cycle. In practice, this means:
- EUR-based supplier terms (where achievable)
- Tighter customer credit terms for newer accounts
- Active receivables management rather than passive waiting
What Changed on the Supplier Side in 2026
Iranian suppliers are, in 2026, more willing to negotiate payment terms than they were two years ago — for a specific reason: the rial depreciation has made USD advances less attractive to hold. A supplier who receives $10,000 today and holds it for 60 days before converting to IRR gains nothing from the hold — and potentially loses if the rial strengthens temporarily. The incentive to receive payment and convert quickly is higher than it was.
This creates an opening for importers to renegotiate: shorter advance windows, partial advance + balance on shipment, or letter of credit structures that reduce the importer’s working capital burden. The conversation is easier when both sides understand the FX incentives.
Three Actions for Importers
1. Map your actual cash conversion cycle. Pull the last 12 months of supplier payment dates and customer collection dates. The actual cycle is almost always longer than the formal terms suggest. Knowing the real number is the starting point for fixing it.
2. Separate credit risk from payment terms. Extending terms to a reliable long-term customer is different from extending terms to a new account to win business. The former is a relationship investment; the latter is credit risk being absorbed informally. Review which accounts are driving DSO creep.
3. Build FX holding cost into margin calculations. Every day you hold USD-priced inventory before converting to EUR revenue is a day of EUR/USD exposure. If EUR/USD can move 1–2% over a 90-day holding period, that movement belongs in your margin model — not as an occasional surprise.
Trade credit management is rarely glamorous. But in a cross-currency, cross-border supply chain, it’s where a meaningful portion of actual margin lives or dies. The importers who track it closely end up with fewer surprises.
Reach us at ahoosh.ai/contact for B2B operations consulting. Daily FX data at t.me/ahooshai.