What is an Invoice Due Date?

The invoice due date refers to a specific date by which the recipient must clear their dues, or they may incur late penalties. Basically, it is a threshold for the buyer to complete the payment without any additional charges. Once the due date passes, the buyer may be required to pay extra fees.

Say, for example, you are working as a freelancer, who develops websites for small businesses. After providing the service, you issued an invoice of $750 on 1st March, including a net 30 payment term.

Now, 31st March is the due date invoice (applying net 30 terms), meaning your client needs to pay the total invoice amount before the due date. Payment done after 31st March will result in late fees.

How to Choose the Right Due Date for Your Invoices

Below are some useful tips to keep in mind when setting the payment due date on an invoice.

1. Know Industry Standards

Firstly, identify the industry standards to set a fair due date. You can utilize short payment terms instead of long payment terms, which are standard in major industries. For example, if you are running a small service-oriented business, you can either go with net 15 or net 30 payment terms. Similarly, if you are operating a large-scale enterprise, you can go with net 60 or even net 90 payment terms.

2. Assess Your Clients’ Payment History

Consider reviewing your client’s payment history prior to choosing the due date so that it can thwart disruptions in cash flows. As you know, not all individuals are late payers and therefore, it is necessary to check their past payment records in order to set the due date. This process will help you filter out the late payers, for whom you can define stricter payment terms.

3. Select a Payment Term

Now comes selecting a payment term wisely, because after all you want the client to understand their financial obligations and fulfill their dues timely. If your business is experiencing a cash crunch, you can set up quick payment terms, i.e. net 7/15/30 payment terms. Or else, roll out early discounts to motivate buyers to settle their invoices before the due date.

4. Align With Your Billing Cycle

Make sure you select the due dates that align with your billing cycle, so your business never runs out of funds. In case your business follows a bi-weekly, or monthly billing cycle, then you must set due dates accordingly to manage incoming cash flows. It ensures you have sufficient funds to cover operational expenses.

The Importance of the Due Date on an Invoice

There are many reasons why you need to write an invoice due date without fail. Let’s go through them.

1. Timely Payments

It goes without saying businesses need adequate funds to continue providing their service. The payments are an important part of the business and thus, every owner needs to make sure they receive the payment in a timely manner. So, mentioning the due date on an invoice will help the client to make the payment before the deadline or they may end up paying the late fees.

2. Maintaining Cash Flows

No business wants to disrupt its cash flows because of clients who fail to make the payment. Therefore, they highlight a due date on every invoice they make, hoping that the client will clear their dues before the last payment date. This is how outlining a due date on an invoice can fix the cash flows for businesses.

3. Ensuring Smooth Operations

Most importantly, businesses need to make sure their core operations are running smoothly, which could not be possible without funds. The due date comes in handy for businesses, allowing them to motivate clients for early payments rather than delaying them for too long. For such reasons, the due date is necessary for every invoice you send to the clients.

Best Practices for Invoice Due Date

Here are some best practices to incorporate while generating a new invoice from scratch.

1. Write a Full Date

Type a due date in the right format, i.e. DD/MM/YYYY whenever you invoice the client. This will give them a clear idea of how soon they need to complete the payment. Writing an incomplete due date will result in too much back-and-forth, delaying the payment by weeks or even months.

2. Consider Online invoice

Ditch the paper-based invoicing and switch to an online invoicing process to underscore the due date. Make an online invoice with a clear due date that itself tells how quickly they need to process the payment. Unlike manual invoicing, it does not deteriorate the quality of an invoice.

3. Verify With Payment Terms

Match the entered due date with the payment terms that you have already only included. You need to make sure the due date aligns with the payment terms you have used. Or else, there are chances of disputes, which will only delay the payment and impact your bottom line.

Set the Invoice Due Date Easily With Moon Invoice

Now that you know the importance of inserting the due date, let us help you add the invoice due date in the simplest way, i.e. using Moon Invoice.

A sophisticated invoicing software alleviates your invoicing game in such a way that you can highlight the due date alongside payment terms and encourage clients to pay quickly.

That’s not all, you can even track when invoices are due or payments without any extra effort, shifting your focus to other activities rather than spending more time on invoicing.

Interestingly, it has over 66 invoice templates to enhance the invoice quality and make sure the due date is clearly highlighted on top of the invoice. Unlike paper-based invoices, you don’t need to set the format or make manual calculations when using Moon Invoice.

Here’s how to generate a clear and polished invoice in a few minutes:

👉Sign up or log in to the Moon Invoice app.
👉Find “Invoices” from the menu & hit the “+” icon.
👉Fill in the details such as invoice number, due date & more.
👉Save the changes & choose the templates of your choice.
👉Review & Send it via WhatsApp or Email.

Conclusion

The invoice due date matters the most when you want to get paid timely and make sure your business operations don’t take a hit. Sometimes if the due date isn’t clearly visible on an invoice, clients may overlook it, leading to payment delays.

Alternatively, you can utilize Moon Invoice to generate professional and high-quality invoices that get paid promptly.

With Moon Invoice, you can underscore the due date, invoice number, and payment terms so easily that the client can pay the outstanding amount without fail and strengthen the working relations. Avail a 7-day free trial now to check out its salient invoicing features.

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