Invoice due date: why it’s important
It’s not rare for us to receive questions from Debitoor users asking how they can remove the invoice due date on their invoices. The reasoning behind this is usually due to aesthetic reasons, but also can simply be because they claim to not have use for a due date.
In any case, omitting the due date from an invoice is a mistake. In more ways than one. If I haven’t stressed enough how important an invoice is as an official business document, well, let’s just say I knowthat's not the case. But as an official document, there is a set series of information that is required. And one of them is clearly stating when your customer must provide payment.
The importance of the due date on an invoice
Unsurprisingly, the main reason to state a set due date on an invoice is to encourage your customers to pay you within a certain period of time. While it is possible to agree on a later payment date, a customer should pay you within 30 days.
If you have a good business relationship or if there are unique conditions to the sale, it is possible to negotiate longer payment periods. However, this still means that you should agree upon a final date for payment that can be placed clearly on the invoice.
Due dates on an invoice
Sometimes setting a due date isn’t as easy as simply choosing the standard 30-day option. If the due date falls on a bank holiday, it can be necessary to extend the due date by a day.
But when setting a due date there are also a few key things to keep in mind:
- Avoid ambiguity when it comes to payment. It’s very common to see terms such as ‘first working day’, ‘end of month’, etc. but the problem is that these terms are surprisingly vague and arguably open to interpretation. To be more clear, state: ‘30 days from date of invoice issue’.
- State the due date in full. This means day, month, and year. Simply putting the month or the day leaves your due date open to unwelcome interpretation.
- State the date of issue in full. Just as important for getting paid on time is the date of issue. This provides a clear window for payment. But keep in mind that if you issue an invoice on a Friday with a 30-day payment period, the due date will inevitably fall on a Sunday, causing you to give your customer an extra day.
- Beware customers who only pay on fixed dates. This is a technique often used by companies to extend the payment period. However, it can be unavoidable as it is often used by larger players with more weight to throw around in the market.
- Invoice payments due the end of December. It’s the holiday season. Not only that but some businesses are wrapping up their fiscal year, both making it difficult to receive or chase payments.
These are just a few suggestions to help you keep your business in the best shape to stay on top of your invoicing and accounts.
Setting the due date in Debitoor
Debitoor invoice templates make it easy to choose from standard payment periods or add a custom date. Select from the drop down menu or set your own date manually by clicking on the calendar icon.
You can also further clarify your payment conditions in the ‘Terms’ or ‘Notes’ fields in the invoice template.
Debitoor invoicing software helps ensure that your payment period is undeniably clear by requiring both a full issue date and due date, all with the goal of helping you get paid faster.