Does your client know when your payment is due upon receipt in a transparent manner?

Payment due upon receipt usually implies payment no later than the following working day. This payment phrase informs customers that you anticipate payments to be made upon delivery of your products or services. It is the best way to be paid in advance.

But the point is, how are you communicating the payment terms with your client? Your company’s success must ensure that your consumers pay you on time. Unless you establish the right conditions under which your customers must pay you and officially agree on these terms with them, you raise the probability of late payments, poor cash flow, and a financial situation that is unsustainable for your business. Many businesses are switching to online payment processing software to provide numerous options of payment to their clients.

Whether using a free online invoice generator or a premium application, you need to emphasize the payment terms while invoicing. In their absence, you are not effectively conveying when payment is anticipated and other criteria such as your payment option, incentives for early payment, and penalties for late payment.

Choosing the incorrect invoice terms may cause cash flow problems and client dissatisfaction with your company. While this is true, it may be challenging for an entrepreneur who is just starting to figure out the best conditions to set to be paid quickly using online billing software for small business while still building good connections with your consumers.

If you still think that “This is not a big deal!” then let’s see a statistical fact that will prove the need for payment terms in invoice.

Following up on late payments takes an average of 20 days per year for the typical self-employed person, according to data from IPSE collected in 2017-2018. According to the Bureau of Labor Statistics, they also lose an average of £5,400 each year due to unpaid work. These numbers are unacceptable for one of our highly successful and dynamic economic sectors, the manufacturing industry.

What Payment Terms Should You Put On Your Invoice?

Payment conditions on an invoice inform a company’s customers about when they are expected to pay the invoice and which payment methods they may use to do so, mainly when the payment is due upon receipt. Businesses may add a variety of payment terms on their invoices, depending on their specific needs.

This blog post will cover two aspects: the terms and a few clever tips for payment terms in invoice and even how an online payment processing software can help you.

What Payment Terms Should You Put on Your Invoice


Other than the above, here are a few more payment terms in invoices which can be helpful with the use of online payment processing software.

1. Pay Using a Line of Credit

This payment option allows the customer to pay their expenses— usually monthly or quarterly — rather than all at once. This translates into enabling customers to buy goods or services on credit.

Because of the risk involved and the potential to negatively impact your cash flow, this is more frequently utilized by more giant corporations rather than small- to medium-sized enterprises.

2. Invoices that are automatically generated

A recurring invoice is generated monthly and is used for continuing services such as gardening or web hosting using a free online invoice generator. It is usually for the same amount each month, similar to a membership or subscription.

Creating recurring invoices from online billing software for small business ensures that your company’s cash flow is secure, makes forecasting a snap, and saves you time by eliminating the need to charge customers every month. This monthly payment removes some of the unpredictability from your life and makes it simpler to manage your finances.

3. Invoice for Interest

What are the ramifications of a customer failing to pay their invoice on the due date? Or the payment due upon receipt? One of the most often used ways is to charge interest or fees on the invoice, one of the most popular options available to creditors. When writing the payment conditions in an invoice, keep in mind that you are only charging for the number of days that the payment has been past due when calculating interest on late payment.

For example, if you charge a 6 percent interest rate on a $1,500 invoice 20 days late, you would divide 20 by 365 to get the interest rate charged. Afterward, multiply the result by.06, and lastly, multiply the result by 1,500. For the 20 days, the interest rate would be $4.93 per dollar borrowed.

In this respect, an interest invoice is more than a memorandum of last payment; it also refers to an invoice that contains the interest fees and a time limit for paying the payment. You can have online billing software for small businesses with specific calculations fixed in it. 

Every month, resend these invoices and make necessary adjustments to the computation to account for the extra days past due.

Important Considerations To Bear In Mind When Selecting Payment Terms In Invoice

There is no solution which can apply to all segments when it comes to payment terms in invoice. Somewhat successful in the eyes of one customer may be ineffective in the eyes of another. You will not need to request a deposit up front if the customer has a solid payment history, while you would need one for a new client. Consider charging in installments for large-scale projects with a high monetary value.

The below are a few ideas to help you choose the best invoice terms for your business:

1. The Background of the Client

Actions speak louder than words when it comes to keeping up with your financial obligations. You can find out how a customer has managed their financial commitments in the past by getting a business credit report. Suppose the data indicates that they have been late with payments to other suppliers. In that case, you may wish to demand advance payment on the invoice or establish a short payment deadline for the invoice in question using an online payment processing software.

Even if a potential client has a high credit score, there is always a certain amount of uncertainty when dealing with a new customer. Using a new customer, you may try various payment options, such as requesting payments using online billing software for small business at different stages of the project after a milestone has been achieved or asking for a deposit beforehand.

If you’ve done business with the customer in the past, you may tailor your conditions to reflect your previous interactions with the client. The continuation of a Net 30 system may be a wise decision if everything has been running well. The ultimate aim of choosing the most acceptable invoice terms is to get paid as quickly as possible.

2. Critically Analyze – “what’s the size of the invoice?”

The smaller the size of an invoice, the less time you want to spend tracking down payment on that invoice. If an invoice is for a few hundred dollars or less, demanding immediate payment or a NET 10 payment deadline may be the most appropriate option using a free online invoice generator. Larger bills may need a more extended deadline since the customer requires more time to raise the necessary funds.

If you’re working on a big project with a new customer, you may want to consider requiring an advance deposit to minimize the chance of non-payment.


Michelle Messenger Garrett, the owner of Garrett Public Relations, is currently engaged in the following activities:

Garrett says he usually uses the term “Net 30” and has “always worked pretty well” for him. Nevertheless, some customers are notoriously slow to pay, so one thing I’ve started doing more lately, particularly for bigger jobs, is charging a portion of the cost upfront. As a result, you may set your expectations of receiving payment promptly straight away.”

3. Establish your conditions in writing clearly and concisely

It would be best to discuss your payment conditions with your client before you begin working on the project. Work collaboratively to find both parties’ best approach. Once you’ve reached a consensus, write down the specifics of your agreement in a contract or an invoice using online billing software for small business.


Documenting your conditions provides you with legal protection if your client fails to pay on time. If you do not get timely payment and your client continues to disregard your past-due bills, you may be forced to take legal action to recover the money owed to you.

4. Invoice quickly to get on-time payments

As soon as you have completed an order or provided a service, create and send an invoice using a free online invoice generator. Delays may result in payments being received later or cash flow being disrupted. 


Cash flow serves as the foundation for the financial infrastructure that supports your company’s activities. Timely payments from customers allow you to focus on your company’s day-to-day business and growth.

Also Read: How to Create Multiple Invoices & Track Payments on a Mobile?

Wrap Up

It may be challenging to come up with the ideal payment terms in invoice. Using a user-friendly free online invoice generator may assist you in automating this process. Moon Invoice, for example, provides a variety of invoice layouts and the ability to establish invoice payment periods. Once it is set up, you may put it out of your mind and concentrate on being paid more quickly.

Small companies should provide their customers with as many payment choices as they can accommodate them while also assisting them in being paid more quickly. Offering various payment options using online payment processing software on your invoice will allow customers to choose the most convenient method, increasing their chance to pay their invoices on time.

If you are looking for online billing software for small business, don’t hesitate to contact us at or +1-805-491-9393.