Pros & Cons of Using ‘Due Upon Receipt’ Method for Invoice Payment Terms

The ‘Due Upon Receipt’ Method

One of the most common methods of receiving payment right after sending an invoice is called due upon receipt. So let’s talk about the payment due upon receipt of invoice terms in detail.

What Does ‘Due Upon Receipt’ Mean?

The term ‘Due Upon Receipt’ means outrightly and explains that the payment is due as soon as the client receives the invoice.

This invoicing term indicates that your clients are ready and make payment as soon as possible. Of course, in this age of online payment gateway or digital payment options, this could also sometimes happen on the same day. However, usually as per the term, clients have to pay you by the next business day.

For the same, you need to create and share a professional invoice mentioning the upon receipt meaning clearly in the invoice.

When to Use or Mark Your Invoices With ‘Due Upon Receipt’?

It sounds like a great move and starts putting ‘due on receipt’ on every invoice to get you paid fast enough. But this invoicing term is not to be used for every job. It works best if you have a new client and require only one-time job work done from you, such as a website or mobile app content, designing a logo, etc. or if you can sense that the client is not interested in repeat business.

No one will stop you from putting this term on every invoice, but it doesn’t seem feasible to let you know and remind you about your payment terms again and again with your regular clients. Likewise, the due upon receipt meaning doesn’t work for regular clients for whom you have been working for years.

So, the payment due upon receipt of invoice terms is only meant for new or one-time or short-term clients from whom you don’t wish to have payment-related delays or risks.

Pros of Using the Term ‘Due Upon Receipt’

The obvious benefit of using due on the receipt is the assurance of getting paid fast for the work done. You can expect the payment to be in your bank account by the next business day and, in certain situations, on the same day if the client is making an online payment for the services.

The other advantage of using this invoicing term of our free invoice generator app is that you might forget about an invoice or two with regular work and invoices lined up for the payments. The receipt method ensures that you do not bear the brunt of losing the money and prevents a few hiccups in your accounting books.

This happens because some clients could take up to weeks and, in the worst case, months to pay you, which surges the gap leading you to forget about the invoice you sent in the first place. This frequently happens with freelancers who are constantly involved in the current task or acquiring a new one.

Moon Invoice’s online invoice software helps you with a payment reminder feature to keep you updated on your upcoming payments. Also, the software offers a recurring invoice option if you work for a regular client.

Cons of Using the Term ‘Due Upon Receipt’

The drawback of using the due on receipt method is that there is no assurance that the client will make the payment the next business day. This is because, at times, clients themselves are waiting for their payment and hence are incapable of paying you for the services.

Moreover, some clients would only want to pay you after checking the work, usually with certain corrections as needed. Finally, you need to submit the work per your client’s specifications, which will delay you in receiving your payment.

So, there can be issues with the time when you are mentioning the upon receipt meaning clearly in your invoice. But this couldn’t be an issue if the client is professional and has a good accounting team.

How to Word a Request for Immediate Payment?

Requesting a payment must always be direct yet courteous. While you generate an invoice, there must be a specified section called ‘Payment Instructions’ where you must specify your business’s clear payment terms, including the due date for payment.

To make it look more professional and elegant, here is how you must request for an immediate payment.

1. Mention a thank you note showing a gratitude gesture.
2. Define payment terms in terms of the specified date. For example: Payment must be initiated within 10 days from the invoice issue date.
3. For payment due upon receipt, always make it easy for the clients or customers to channel the payment by adding direct payment links in the invoice.

Invoicing Tip: Do not let your payment reminders surprise the client. Be specific about the payment terms or cycle from day one of your contractor or sale.

Alternative Invoicing Payment Terms to Consider

Are you still using the default payment terms in your invoice? Well, that can be really outdated, making no sense, as companies must define their custom payment terms in invoices.

1. Net 30: Demanding the client to pay the invoice within 30 days from the receipt of goods or services.
2. Net 60: Demanding the client to pay the invoice within 60 days from the receipt of goods or services.
3. Net 90:Demanding the client to pay the invoice within 90 days from the receipt of goods or services.
4. Due Upon Receipt: Demanding immediate payment right after the invoice has been issued.

Send Invoices Integrated With Payment Link!

One of the best ways to help your clients pay you on time is by downloading our invoice maker app, Moon Invoice. It has an auto-pay button to enhance the concept of payment due upon receipt of invoice terms. Here is how you can expect quick payment from the clients by integrating the paid link.

Our online invoicing software helps you integrate direct payment links in the invoice. Hence, you need not worry about the payments. Clients can verify the invoice and pay you on time by clicking on the payment link. Also, our free invoice generator app helps you get a payment alert when a client sends you the payments.

Hence, it is quick and easy to get your due payments in your bank account by integrating a simple pay button in your commercial invoices. Also, you get a terms and conditions or notes section in the invoice to mention the payment due upon receipt invoice terms.

Final Summary

To conclude, due on receipt is an invoice term used to get paid fast so that your work does not get affected by cash flow. It has a few downsides, but it mostly benefits freelancers and business owners who need the money right away. You can benefit from due on receipt with our free invoice generator.

If you are unsure and looking for an on-the-go available & free invoice generator, click here. You can go with a free trial period and check for yourself how seriously your clients take you and your work so that you get paid quickly.

Moon Invoice is a professional invoice app maker proven to be a boon for solopreneurs, entrepreneurs, and business owners.  It provides you with multiple payment options along with efficient payment terms. With Moon Invoice, you can work anytime, anywhere, and on top of it, the app is available for all platforms, i.e., iOS, macOS, Android, Windows, and WebApp.

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