Before we discuss what is due date for an invoice, let’s discuss What is the due date in any official document, first.
Due date is an important field in any official document. And it becomes even more significant and critical when the document deals with money related information. Who in the world would ever like a late payment? Try lending money to a friend and the importance of the due date will be clear!
Invoice is a very important document, and in a way a legal obligation for the customer to pay back to the seller for the services received. Now, the payment duration cannot be left open-ended as it will lead to complicated litigations at a later stage. Also, the seller needs money for his future projects and he can’t keep providing service in hope that someday his money would be returned. The online invoice generators like Invoicetra have these fields already included in their templates to make invoicing convenient for their users.
What dates are there in a standard invoice?
There are mostly three different types of dates in a standard invoice template:
a) Invoice Date– The date on which an invoice for a service or good is generated or issued. It may or may not be the day on which goods are sent or services rendered. It also helps distinguish the invoices from each other and assists in maintaining records.
b) Delivery Date– As the name suggests, it’s the date on which goods were delivered or service was provided to a particular customer. If it’s not the same as the issue date then it must be mentioned on the invoice to avoid any confusion in the future.
c) Due Date– It’s the date on which payment against a specific invoice is due. It is not a legal but a social requirement and is advisable to mention the due date clearly on an invoice. It will make the invoice document more professional and recordable.
Benefits of adding a Due Date in an Invoice
The advantages of mentioning the due date in an invoice are as under:-
a) It obliges the customer to pay his dues in time.
b) The seller can count on the amount to be received on that date for his future projects.
c) It assists in solving any future legal obligations.
d) It helps maintain a healthy seller-customer relationship.
e) It helps to keep a periodic record of progress and profits.
f) It affirms your invoice document as many firms especially legal firms won’t respond if the invoice is without a due date.
g) The above points in turn help send a positive image about the company and brand.
The consequences of not adding a due date in an invoice are many as it gives the customer a chance to delay payment or not do payment at all. It is advisable to always mention the due date in an invoice in advance and keep payment terms clear with the customers.
What if the Due Date in an Invoice is passed or the client is a very slow payer?
It is quite common that small businesses with low annual income growth often avoid timely payments. If you come across such clients, which by the way will be easily inferred from their payment pattern, there are some steps you can take to get them back on track:-
a) Pursue your maximum outstanding invoice amount first.
b) Communicate with the head of the department through documented mails.
c) Make the payment process easy for the client using payment gateways.
d) Consolidate all outstanding invoices into one statement.
e) Send documented reminders periodically.
f) Last but not the least, avoid such clients in the future.
Due date is an important field in any invoice be it a manual invoice or generated online. It is a major factor in deciding the company’s cash flow, the pace of your company’s progress, and the brand impression. Various online invoice generators like Invoicetra have made the whole process of invoicing simple by taking care of these small but important features of invoice. The due date in an invoice will give you the authority to send repeated reminders to lazy payers. The online invoice generator will help automate the whole accounting process by monitoring the data based on dates thus giving you more time to plan future endeavors of the company.