An invoice is an important business document when it comes to demanding payment from a client for your services. Once you issue an invoice, it becomes the buyer’s responsibility to settle the bill within a given timeline. But, paying an invoice can sometimes be challenging, especially when you only accept cash payments. As a result, many of your clients may have similar questions — how to pay an invoice.
Likewise, the hassle of paying invoices can also pose challenges for business owners managing their accounts payable. That’s right, you, too, need to pay suppliers or vendors, and if payments are delayed, they might charge you late fees. So, whether it’s a business or a client, they often have a common concern: ‘how to pay an invoice.’
But worry not! We have a comprehensive guide on how to pay an invoice in a timely manner that you might want to consider. So, let’s dive deeper into this topic.
What is an Invoice Payment?
A payment made in response to an invoice to the supplier of the products or services is called an invoice payment. It is a due payment made by a client toward the outstanding amount. Invoice payment is one of the final steps of the AP process for paying invoices.
An invoice is a written statement that lists the specifics of any products or services sold and asks for payment for those goods or services.
The date, a unique invoice number, the quantity, and VAT details are typically also included. Credit conditions and payment information are also added.
The seller company will send invoices to the clients, which will result in payment for the item or service you provided.
Receive Payments Timely with Professional Invoices
Choose Moon Invoice to generate professional and polished invoices that get paid 2x faster.
How to Pay an Invoice on Time
Invoices can be paid timely when you are using software like Moon Invoice for your administrative work. It helps you generate professional invoices that get paid by tapping on the payment link or other online payment methods. Here’s how do you pay an invoice.
1. Check the Due Amount
Whenever you receive an invoice, the first thing you should do is check the outstanding amount and make sure it’s correct for the products & goods you purchased. If not, get in touch with your supplier and ask them to revise the amount. Apart from the due amount, also know if your name, phone number, or email address are correct. This is because once an invoice is paid, you need to save such things in financial records for tax purposes. So, you should ensure everything is correctly mentioned in an invoice.
2. Know the Last Date of Payment
Review the last day of the payment to be made from your side. Read the payment instructions carefully to complete payment on time and avoid any late charges. Knowing how much time you have to make a payment means you will learn if you need to pay urgently or focus on other pending dues that might be approaching due dates.
3. Tap the Payment Link
If everything is correct, then proceed with the payment. Invoices generated through software like Moon Invoice will have an in-built payment link. Tap on the payment link and you will be asked to complete the payment using your bank account. Let us know how to pay an invoice using advanced software like Moon Invoice.
- Open the Moon Invoice app & go to ‘Invoices’.
- Create a new invoice by entering all the necessary details.
- Choose the payment method & save the changes.
- Customize invoice templates by choosing different designs.
- Take a printout or directly send it via WhatsApp or Email.
- Once shared, the client can pay the amount by tapping on the payment button.
11 Tips to Pay an Invoice on Time
Whether you are a business owner or client, you need to pay the full amount on time once you have received an invoice. If not, the issuer may start legal proceedings against you. To avoid that, we have compiled a list of 11 tips that will help you pay an invoice in a timely manner.
1. Establish an Organized Payment System
Effective payment organization requires consistency. Create a uniform manner of paying your invoice from the time you get it until the day you make the payment to develop a consistent procedure. Keep invoices organized, to reduce the hassle of finding them frantically. Invoice filing can be done physically or digitally.
2. Schedule Payment Reminders
When no unexpected bills are due, it also makes you feel more at ease. For that, you need to get an automation tool that reminds you of unpaid invoices and how soon you need to get the amount paid. Setting reminders will help you avoid missing a payment. Every invoice your business receives after filing needs a reminder set.
3. Keep Updated Vendor Information
When you keep your vendor’s contact information on hand, you can simply get in touch with them regarding invoice payments. Having updated information means you can easily get the payment done using digital wallets. You no longer need to search transaction details manually which may eventually result in late payments. Businesses can save vendor transaction details on their smartphone or tablet to get an invoice paid using online payment modes.
4. Seize Discount Opportunities
Some sellers may offer discounts for those who pay early. It can be an opportunity to obtain a particular discount when you are willing to pay an invoice. Here, you are not only clearing the dues on time but also paying less than what was the actual price of a product or service. Taking a benefit of discount offers will make sure you pay invoices on time and develop healthy relationships with suppliers or vendors.
5. Organize Accounts Payable
Instruct your account team to keep track of accounts payable and accounts receivable in a well-organized manner. This process will help you manage the budget of your company so that you can process the payment swiftly for different vendors. It would be easier to know the business expenses and remaining balance in your business account. When you have maintained account payables in the sheet with accurate data, you may not miss out on paying invoices.
6. Build a Cash Reserve
Small businesses know the pain of clearing the outstanding amount once the cash flow is disrupted. So, there should always be a plan B in case plan A doesn’t work. Plan B comes into effect when you are experiencing a cash crunch and helps you make the payments. This way, you will not have to deal with late payment fees or risk damaging your reputation. To achieve this, you need to develop a habit to keep a cash reserve. This money-saving technique will come in handy in case sales are declined in a particular month.
7. Evaluate Products or Services
Upon receiving a bill, you should review the quantity of products delivered or whether services are provided properly. This is because if you spot any inaccuracy in an invoice, halt your payment for a while and ask the supplier to get a revised invoice. After all, you need to pay only for the items that are delivered. If you see everything is fine, then proceed with the payments. Such an accurate invoice from suppliers itself motivates you to pay an invoice right away.
8. Only Pay in Accepted Currency
Your payment should be made in the currency that is accepted by the vendor. This is because if you pay the amount in another currency, then you will be charged for currency conversion fees. Therefore, you must have automation tools that can help you pay in different currencies when it comes to clearing the pending dues. You can ask the vendor to confirm the currency accepted at their store before transferring the amount.
9. Keep an Eye Out for the Payment Deadline
You can track the payment due date manually or use software or an online calendar to help you remember when the last date of payment is. This practice ensures you always complete the payment using credit cards or bank transfers no matter where you are. These automation tools are a must for businesses to remember payment deadlines and complete the payment on time. If anyhow you miss payment deadlines, then you need to pay extra fees in the form of a penalty.
10. Select Your Payment Method
Since every business prefers different payment methods to get an invoice paid, you also need to decide on which payment method you will use. You can ask the supplier to send a payment link so that you can pay the outstanding amount straightaway. Some vendors may ask for your preferred payment method at the time the invoice is generated.
This benefits both the business and the vendor, as it helps avoid delays in product delivery or payment. Make a note of the payment option that benefits your company the most so that you will be prepared to pay the invoice when the time comes.
11. Invest in Invoicing Software
If paying an invoice on time is concerned, investing in reliable invoicing software like Moon Invoice can be worthwhile. The software will send a reminder about pending dues and also empowers you to send reminders to your clients as well. You can integrate different payment methods to complete the payment in just a few clicks. Also, you can turn on automatic payments to timely pay the bill. As a result, you can save time and effort.
Get Your Invoices Paid on Time, Every Time
Moon Invoice offers 15+ payment gateways to accelerate your payment process without requiring clients to step out of their comfort zones
Safest Payment Methods to Pay an Invoice
Invoices can be paid by using different payment modes, online or offline. However, only a few of them are the safest way to initiate payment transactions. Let’s have a look at them.
1. Invoice Payment by Credit Card
Modern customers usually prefer credit cards to transfer money because it is not only a convenient way but also one of the safest ways to clear dues. Credit cards provide multi-layered security for both sender and receiver, this means your transaction details won’t be shared with unknown sources. However, processing fees may be applied for every transaction you make. So, next time if the supplier asks for your preferred payment mode, you can say credit card. This way, you can pay the money securely using your credit card.
2. Payments via Bank Transfer
Other than credit cards, you can opt for bank transfers to clear your dues right away. Sometimes known as ACH credit transfer, bank transfer can allow you to transfer money to a third party anytime in the most secure way. Unlike credit cards, this payment method doesn’t charge any processing fees, but you may need to enter more details before initiating the transaction. This option is ideal for recurring payments as you can turn on automatic payments to clear dues on time.
3. Use Digital Wallets
Digital wallets have become a common choice for customers to make the payment securely. Invoice payment methods for example Google Pay, Apple Pay, and many other popular digital wallets offer robust protection for user’s transaction details, leaving no chance of exposing any information. These e-wallets also boast a fraud detection system to combat any suspicious activity so that users can transfer money easily. With digital wallets, there is no need to enter transaction details repeatedly.
Conclusion
Paying an invoice only takes a fraction of a second if paid online using secured payment methods. Here, we discussed how to pay an invoice timely and also shared some tips to remember while paying an invoice. Since online payments have overshadowed cash payments, clients can now clear their outstanding amounts without wasting a minute. If you’re having issues with a client’s payment, then we recommend using software like Moon Invoice. It is a sophisticated invoicing software that can help you create professional and polished invoices to get you paid 2x faster. Try using it for free.
FAQs
Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.
