The standard invoice presentation shows the invoice date in one of the upper corners, and the payment terms (such as “Net 30”) somewhere in the header bar, just above the detailed billing information. For the customer to calculate the proper payment date, she must locate the invoice date, add to it the payment terms, and enter this payment date in her computer system. The reality is more complex. The typical accounting computer system automatically defaults the invoice date to the current date (invariably later than the invoice date), and adds to it a default payment terms date that is stored in the customer file. Thus, there are two ways for a customer to delay payment – be lazy and accept the current date as the invoice date, and always use the pre-set payment terms. Even when a company carefully renegotiates new payment terms and lists this information on its invoices, the customer usually ignores it due to the presence of pre-set payment terms in the customer’s computer system. The result is chronically late payments.
The solution is to take the payment date calculation chore away from the customer and clearly state the invoice payment date on the invoice, preferably in bold and located in a box. To make matters as simple as possible, it may make sense to even eliminate all mention of payment terms, so the customer does not try to second guess the company on the proper payment date.