Are your invoices due upon receipt? Read on.
You want to get paid, and you want to get paid now. So come invoicing time, you tack on due upon receipt. Basically, a business-appropriate way of saying ASAP, and nothing is faster than ASAP, right? Think again. The lack of built-in specificity creates wiggle room for your clients and can delay payment more than any net term. Here five reasons it’s time to make the switch.
Reason 1: “Due upon receipt” can turn into “Due whenever the client can pay”
In the best-case scenario, your client would turn around payment by the next business day. And while those star clients exist, some take due upon receipt as an opportunity to come up with a deadline that’s convenient for them. Usually, it’s a calendar date coinciding with their cash flow activity.
Reason 2: The wrong terms surprise your client
There is sweet satisfaction in wrapping up a client project ahead of your deadline. Naturally, you’ll want to send off the invoice straight away. While this sounds like #goals, clients may beg to differ. Early billing can catch clients off guard if they haven’t timed themselves accordingly, are waiting on their paydays, or need some internal approval.
Reason 3: Everyone is on the same page
What’s worse than waiting to get paid? Not knowing exactly when cash is coming. Fingers crossed your client issues payment without a hitch, but good luck keeping up with your business needs if they don’t. The easy fix: Crystal-clear net terms that don’t allow clients to hide behind ambiguity, a weekend, or even a holiday. Plus, you’ll know when to take action if they pass their window.
Reason 4: Net 30 has hidden powers
Businesses often team Net 30 terms with discounts that incentivize clients to pay early. For example, a company might offer a 2–5% discount for payment made within a week. If the business relationship is ongoing or you are billing for a large one-off project, the cost savings can be a sizable perk for clients. You can also tack on a late-fee policy on your invoice to motivate timeliness.
Reason 5: Keeps your money organize
Staying on top of your books can be taxing on your time and energy. Defined billing terms create a schedule and stop stress-inducing questions like When is my client paying? What do I do if they don’t pay the whole amount? When do I follow up? On any given day, you’ll know where your invoices and money stand.
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