As a business owner, it is essential to have your financial records in good order, and this often starts with sending and managing invoices. Two important terms that often come up here are the due date and payment term of an invoice. In this blog, we explain exactly what these terms mean, why they are important and how software such as TriFact365 can help simplify this process.
What is a Due Date on an Invoice?
The due date of an invoice is the date by which payment must be received at the latest. It is a crucial part of the invoice because it clarifies when the customer must pay to avoid late payment. The due date not only gives clarity to the customer, but also provides an overview for the business owner to know when to expect payment.
Depending on the agreements made, the due date can be a few days to months after the issue date of the invoice. In the Netherlands, it is common for the due date to be between 14 and 30 days after the invoice date, but this can of course vary.
Payment term: what does it mean?
The payment period is the period within which payment of the invoice is due. In other words, it is the time between when the invoice is sent and the due date. The payment period may be shorter or longer depending on the situation, but it is important to state it clearly on the invoice to avoid misunderstandings.
So the payment term is the number of days a customer has to pay the invoice. For example, if the payment term is 30 days, the customer must pay the invoice before the due date of 30 days from invoice date. It can be useful to state the payment term on the invoice so that it is clear to both parties when payment is expected.
The Importance of Clarity
Clear agreements on due dates and payment terms are important to avoid financial problems or misunderstandings. If payment is delayed for too long, it can be annoying for the entrepreneur, especially if the payment is substantial. So it is advisable to set clear terms and ensure that the customer understands the expected payment term.
How TriFact365 Helps Manage Invoices
TriFact365 is an invoicing and accounting software that helps business owners manage their invoices and records. The software is user-friendly and allows you to process invoices quickly.
Invoices are essential for healthy cash flow as an entrepreneur. TriFact365’s user-friendly features make it easy to manage your invoices. This saves time and effort and allows you to focus on growing your business while your financial records run like clockwork.
