An invoice due date anchors every aspect of your payment transaction, including financial planning and customer relations. The due date shapes payment terms and late fees, helps all parties feel secure about how they’re doing business together, and signals a basic level of professionalism clients tend to appreciate.
Below, we’ll explain the mechanics of invoice due dates, the variety of terms businesses can choose from, and tactics for handling payments.
What’s in this article?
- Which standard due date fits your business?
- How to choose the right due date for your invoices
- How to ensure your due dates stand out on invoices and contracts
- What to do when invoices are due and payments are late
- When to adjust due dates, and when to hold firm
Which standard due date fits your business?
Choosing the right due date for invoices can make a big difference in how easily (and quickly) you get paid. Here are the standard options and when they typically work best:
Due upon receipt: This is the “pay me now” choice – for situations when you want or expect immediate payment. It works well for small projects or if you have a relationship with clients who are used to quick turnarounds. Remember that not every client can or wants to pay the moment they receive an invoice, so use this when you know they will be comfortable with the window.
Net 15: A 15-day window gives clients more time to pay without making you wait too long to receive payment. This can be a good choice for regular, lower-value projects or if you’re working with smaller businesses that pay quickly.
Net 30: Net 30 gives clients a solid month to pay. That’s more time to manage their expenses and still a reasonable waiting time. It’s a go-to for many business-to-business (B2B) transactions and usually strikes the right balance between flexibility and prompt payment.
Net 60: Net 60 terms are more common with larger clients or bigger projects with higher stakes (and invoice amounts). You can often expect this timeline when you work with large corporations or government agencies. It works well if your business can handle a longer pause between payments, but it’s not ideal if you need faster turnover.
Net 90: Some industries or big clients might request net 90 terms, though this is more rarely used. Manufacturing and certain large-scale industries sometimes work with these terms. It’s a long wait, so go this route only if you can comfortably wait a few months to receive the payment.
How to choose the right due date for your invoices
To choose the right due date for invoices, balance your business’s financial needs with your client’s ideal payment schedule. Doing so can lead to more predictable payments and stronger client relationships. Here are ways to set a suitable due date:
Know your client’s schedule: Some clients pay bills only on certain dates such as the 15th or the end of the month. If you can time your due date with their usual pay cycle, you’re more likely to receive payment without delay.
Match terms to project size: Smaller, straightforward jobs are good candidates for shorter terms, such as net 15. Bigger, more complex projects might need a longer window – for example, net 30 or net 60. This gives clients breathing room without making you wait too long.
Think about your cash needs: If you rely on steady incoming cash to meet your expenses, consider shorter payment terms. Ensure the timeline is fair to clients or you risk getting payments later than you planned.
Follow industry standards: Payment terms such as net 30 and net 60 are common because clients are used to them and they’re typically accepted as fair. Knowing the standard in your industry can help you set terms that feel familiar to your clients.
Be clear and consistent: Whatever date you choose, make sure it’s prominent on the invoice and discuss it up front, if needed. That way, there’s no room for confusion.
How to ensure your due dates stand out on invoices and contracts
Making due dates stand out on invoices and contracts helps avoid payment delays. Here are ways to ensure your clients see – and remember – when payments are due:
Put the due date front and centre: Place the due date at the top of your invoice or near the total amount. You want it to be one of the first things clients see when they open the document.
Use bold fonts or different colours: Using bold text for the due date or using a colour that contrasts with the rest of the text can make it pop. Don’t go overboard with colours; a single standout colour will suffice without overwhelming the rest of the invoice.
Add a clear label: Instead of listing only “Net 30” or “Due Date: 09/15/23,” try “Payment Due By” followed by the date. This way, there’s no question about when payment is expected. Simple, direct wording can make the difference.
Repeat the due date in a few places: Repeating the due date in multiple sections – such as near the total amount and in any payment terms section – can reinforce its importance. This also reduces the chance a client might overlook it, especially on a busy page.
Use automated reminders: If you’re using invoicing software, configure it to send automatic reminders to clients. Many platforms let you schedule these at intervals (such as one week before the due date), so you can keep the due date on the client’s radar without having to follow up manually.
Include a brief payment policy: A short statement about your payment terms – including late fees or incentives for early payment – can help clarify expectations regarding the due date. This way, clients know you’re serious about timely payments.
Design for simplicity: A clutter-free, well-organised invoice makes it easier for clients to find important details, including the due date. Avoid crowding the page with too much information; focus on a clean layout that lets your due date stand out naturally.
What to do when invoices are due and payments are late
In the United States, 55% of B2B invoices pass the due date and become overdue. Late payments are frustrating, but there are ways to handle them without burning bridges. Here’s how to tackle overdue invoices:
Start with a friendly reminder: Sometimes, clients just forget. A polite, casual email mentioning the invoice, the due date, and the amount can often be enough. Keep it light and friendly – you’re checking in to ensure the invoice didn’t slip through the cracks.
Follow up with a call: If you don’t hear back after that first reminder, try a phone call. Emails can pile up, but a brief chat often cuts through the noise. Keep it friendly but direct – confirm they got the invoice and see whether there’s anything you can help with.
Resend the invoice with late fees, if applicable: If your terms include late fees, now’s the time to politely bring them up. Resend the invoice, noting any added fees, but ensure the client knows about these terms ahead of time. Surprising clients with extra charges can backfire, so a heads-up can help keep things on track.
Offer a payment plan, if needed: If the client seems stuck, consider offering a payment plan. It’s a good way to show flexibility while still working toward full payment. This can help you get some cash flowing and signals you’re open to solutions.
Consider an in-person visit: For local clients you know well, you can visit them to show you’re serious but still invested in the relationship. Keep it professional, and use the check-in as an opportunity to do some problem-solving if they’re struggling.
Send a formal demand letter: A demand letter can be a helpful next step if you’re getting nowhere. This is a clear, final notice that you expect payment. It signals you might take further action. Depending on how strong you want your messaging, you can draft it yourself or have a lawyer handle it.
Use a collection agency: If all else fails and the unpaid amount is worth it, a collection agency might be an option. The agency typically takes a percentage of whatever it collects, so this is usually a last resort. But the agency can help if the amount owed is large enough and you’ve exhausted other routes.
When to adjust due dates, and when to hold firm
Knowing when to adjust a due date and when to hold firm can make a big difference in managing client relationships and stabilising your cash flow. Flexibility shows you value the client, while holding firm communicates you take your payment terms seriously. It comes down to the needs of your business and your client.
Here are scenarios when it’s a good idea to adjust due dates:
If you’re working with a long-term client who typically pays on time but asks for an extension, it’s often worth extending the due date. Flexibility shows goodwill and reinforces your commitment to the relationship. Clarify that it’s a one-time courtesy to avoid setting a new expectation.
Large projects with multiple phases sometimes experience delays. If the client isn’t the cause of these, it can be fair to adjust the payment timeline. Aligning payment milestones with project phases can make the process smoother for both parties and keep the work moving forward without a stand-off over dates.
When external factors such as economic downturns affect clients, a bit of understanding matters. Offering an extended due date or implementing a temporary payment plan can help keep relationships intact during tough times, and clients will remember that flexibility.
Here are scenarios when it’s a good idea to hold firm to your payment terms:
For new clients, it’s smart to hold firm on the agreed terms until you’ve built a payment history with them. Sticking to the due date sets the standard and reduces the risk of late payments.
If you’ve invested up front in materials, time, or labour for a project, maintaining the due date helps ensure you’re not left covering those costs for an extended period.
If a client has a habit of paying late, it’s usually best to hold firm on the due date. Constantly adjusting for clients who are habitually late can set a pattern that’s tough to break. Staying firm reinforces the importance of timely payments and signals late payments aren’t the norm.
Sometimes, a delayed payment from one client affects your ability to deliver for others. Hold firm on the due date in these cases so you can manage resources, pay staff, or keep projects moving.
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.