One of the most common questions regarding invoicing concerns the due date. When should the funds appear in your account? The general rule and established practice is simple: the due date is the latest date by which the invoice must be paid. This does not automatically mean the date when the funds are already available to you.
Bank delays and fund transfers
Even if a customer makes a payment exactly on the invoice due date, it typically takes some time for the funds to be transferred due to interbank processing. Because of this natural banking delay, it is completely normal for the funds to arrive and appear in your account only a few days after the actual due date.
Differences between consumer and business billing
The type of customer being billed determines which rules and recommendations should be followed in the payment terms.
Consumer customers
It is recommended that invoices sent to consumersalways include a payment term of at least 14 days. This is in line with the guidelines of the Consumer Agency and good invoicing practices. In consumer trade, the due date is absolute: it always refers to the date by which the customer must make the payment.
Business customers
In business-to-business(B2B) transactions, practices are more flexible. Due dates and other terms are based on the delivery and payment terms agreed upon between the companies. Although the general rule remains the same, companies are free to agree on payment terms as they see fit.
However, there is one key rule of thumb that invoicers should keep in mind: the due date indicates the deadline for the customer’s payment obligation, not the date the funds will be received.