What are invoice payment terms

When you create an invoice your customer need to know when to pay, and this is dictated by the payment terms.

The payment terms are the number of days before payment is required, ranging from immediate to any number of days in the future. Invoiceplace has been updated to give you more flexibility specifying the payment terms, previously only a number of days could be entered. Now there are more options for indicating immediate payment is required.

Payment terms vary by industry, where you live, who you are selling to and the value of the goods purchased. For example if you have a long term freelance arrangement with a large customer (who pay their bills regularly) your terms are likely to be more generous than for a new customer with a one-off project.

Immediate payment

The following payment terms indicate that payment is due immediately, specifically when the invoice is issued which is determined by the invoice date.

  • Due on Receipt (DOR) – This is used when you ship goods to your customer. DOR means that payment is due when your customer has received what they ordered.
  • Upon Receipt – (See DOR).
  • Payable Upon Receipt – (See DOR).
  • Pay on Receipt – (See DOR).
  • Pay in full on receipt – (See DOR).
  • Cash on Delivery (COD) – Similar to DOR, payment is due when the goods are received by your customer. Today many businesses will accept COD payments in more than just a fistful of banknotes, and can include check or credit card. If you only accept a cash payment you will need to make that clear when selecting the accepted payment methods for the invoice.
  • Collect on Delivery (COD) – This is a variation of Cash On Delivery to avoid confusion as to whether payment is required in cash only. The ‘Collect’ is referring to the collection of payment, not your customer collecting what they bought.

Payment is due a certain number of days past the invoice date

Generally Businesses are more generous with the amount of time required to pay, and allow a certain number of days after the invoice is issued to receive payment.

  • Net 30 – Indicates payment is due 30 days after the invoice date.  The number of days varies, for example ‘Net 7’ indicates payment is required within seven days.
  • 30 – (See Net 30).
  • 30 days – (See Net 30).

Payment terms set clear expectations

Use payment terms when billing to make it clear to your customer when you require your invoice to be paid.

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Comments (2) to “What are invoice payment terms”

  1. [...] to choose any payment due date. The due date is determined by adding the number of days in the Payment Terms to the invoice [...]

  2. [...] provides the freedom to set your own invoice payment terms (the number of days until payment is [...]