Glossary · Credit Management
Payment Terms
The agreed timeframe and conditions for a customer to pay an invoice, such as net 30 days from the invoice date.
Defining the terms
Payment terms set when an invoice falls due and on what conditions. Common forms include net 30, payment on receipt, or end of month following invoice. Terms may also cover deposits, instalments, and any early payment discount offered for prompt settlement.
Making them stick
Terms only work if they are stated up front in the terms of trade and printed on every invoice. Tighter terms improve cash flow but can deter customers, so balance the two. Issue invoices showing clear due dates through Merion invoicing.
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