What is the Invoice Due Date?

The invoice due date is the date on which a seller expects to receive payment from a buyer. The recipient of an invoice enters this date into their accounting software, so that the system will know when to schedule the invoice for payment. It is essential to present this information clearly on an invoice, so there are no misunderstandings about when an invoice will be paid.

How to Determine the Invoice Due Date

It can be complex for a customer to calculate the date on which an invoice is due. The customer must locate the invoice date (which could be located in one of several spots on the invoice), as well as the payment terms (which may not be located adjacent to the invoice date), and then calculate the due date based on these two items of information. Thus, if the invoice date is April 15 and the payment terms are net 30, then the due date to enter in the accounts payable software is May 15. In short, if the customer does not carefully examine the invoice, there is a good chance that the wrong due date will be entered, which impacts when the seller is paid.

To make matters worse, most accounts payable systems default to the current date as the invoice date, and combines this with the payment terms stored in the customer master file to arrive at a calculated due date. Since the current date is always later than the invoice date, this means that the company will be paid late.

Invoice Due Date Best Practices

Here are several best practices relating to the invoice due date concept:

Clearly state the due date. To remedy any uncertainty about the invoice due date, state the exact date on which payment is due on the invoice, in bold large font, and in its own box in a prominent location on the page. Doing so makes it much less likely that the customer will ignore entering the due date in the accounts payable software.
Avoid listing payment terms. Do not list any payment terms on the invoice - only the due date; presenting less information makes it more likely that the customer will locate the due date on the invoice.
Communicate payment policies in advance. Discuss and agree upon payment terms before starting work or delivering products. This minimizes the risk of a customer late payment or non-payment.
Use consistent due dates. Avoid confusing clients with varying payment terms for different invoices. Instead, apply the same payment terms to all invoices.