invoice clear payment | Online invoice software

Why Is It Important to Have Clear Payment Terms in Your Invoice?



Introduction  A payment term indicates the period given before payment for an invoice is due. The payment term is usually presented in your invoice, and in best practice, it should be determined before doing business with a new client.

Points to Consider  Speedier Payment  Allows For Better Cash Flow Forecasting  Maintains Great Customer-Supplier Relationship

Speedier Payment  By setting down your payment provisions, you notify your customer of your expectations when payment is due. With a definite date in your mind, customers will be more mindful of the pending deadline. Utilizing additional conditions like late payment fees or reductions when premature payment is created can further incentivize your customers to pay on time.

 Speedier Payment  By setting down your payment provisions, you notify your customer of your expectations when payment is due. With a definite date in your mind, customers will be more mindful of the pending deadline. Utilizing additional conditions like late payment fees or reductions when premature payment is created can further incentivize your customers to Pay on time.  Allows For Better Cash Flow Forecasting With established payment terms, you’ve got a much better picture of if your cash inflows from invoice payments have been scheduled. Equipped with this information, you are able to budget for future jobs and updates and manage your cash flow.

 Maintains Great Customer-Supplier Relationship Having clear payment provisions established early in your customer-supplier relationship minimizes any confusion and puts the bar of what’s expected. Both parties would obviously prefer payment provisions which are more valuable for them, but a compromise has to be made.  Without establishing payment terms, there may be a dispute once an invoice is issued, and payment is expected, as both parties will insist on their preferred payment terms. Maintaining good relationships with your customer is essential in boosting recurring orders and client retention, so it is better to decide on the terms beforehand to prevent unnecessary conflict.