Setting Due Dates for Invoices
List of contents:
- Why are invoice due dates essential?
- What is the difference between invoice date and due date?
- How can you set due dates’ levels for your invoices?
- What do these levels refer to?
- The effect of different due dates settings
- How to set a due date for a specific invoice
- What are the available options for the invoice due dates?
- How to customize a new due date
What is the Invoice Due Date?
The invoice due date is the latest date payment can be made on an invoice before it’s considered overdue. The due date is usually written in the invoice that customers get so they are aware of the latest date they can make their payments before they are considered overdue and subject to other consequences.
Why are invoice due dates essential?
- The main reason to state a due date on an invoice is to encourage your customers to pay you within a certain period. While it is possible to agree on a later payment date, a customer should pay you within 30 days or upon the completion of service. In certain industries, it is also acceptable to request a deposit to be paid against the invoice before starting the job.
- The invoice is the official financial document used to request payment, so including the due date makes it clear to your customers when exactly the payment is expected and to avoid any potential for denial of knowledge of the payment date.
- Organizing your invoices, so you can always check the due date invoices you are expecting to get from your customers and also the overdue invoices that haven’t been paid yet.
What is the difference between invoice date and due date?
The invoice date refers to the date when the invoice is created, while the due date refers to the date when the payment is due against the invoice.
How can you set due dates’ levels for your invoices?
You can decide if you want to set your due date on the company level, on the customer level, or the invoice level.
What do these levels refer to?
When you set your due date on the company level that means all the invoices of your company will be updated to that due date. However, that new due date will only affect the future invoices that have no due date on the customer level or the invoice level.
You have the option to also set a default due date for each customer, which means you specify a certain due date to apply for all the invoices of that customer unless there’s another due date already manually set for an invoice belonging to this customer.
That leads us to talk about setting the due dates on the invoice level, when you select a due date for a specific invoice you are being particular about the due date of this invoice only, which won’t affect other invoices and will take priority over any default due date set at the customer level or in your company settings. So any other due dates settings on the company level or the customer level won’t affect the invoice due date.
The effect of different due dates settings
For a better understanding, you can check the next hierarchy for the effect of the different due dates settings:
Updating the due date for an invoice:
Updating the due date of the invoice itself away from any other due dates pre-made on the company level or the customer level. For example, your company’s due date is set to 15 days, and for your customer “John Smith” a due date is set to 7 days. If your customer ”John Smith” has an invoice that has been created on October 10 and you need to set this invoice due date to be within 2 days. That means the new invoice of your customer “John Smith” will be due for payment on October 12, the due date of the invoice won’t be affected by the default company due to the date set already or the default due date set for this customer in their profile.
Updating the default due date in the customer profile:
Updating the due dates for all the customer invoices, however, the new customer due date will only affect the future invoices, unless the admin selects “Yes” when the automatic message appears after saving, asking if they need to update all existing outstanding invoices for that customer, in this case, the new due date will apply on both the future invoices and the existing invoices that have due dates settings on the company and the customer level, the invoices have a due date on the invoice level won’t be affected. For example, if you set the due date for your customer “Y” to be 10 days, that means all the due dates for the future invoices belonging to this customer will be 10 days. If you need the existing invoices of the customer to be the same due date too, select “Yes” when the popup appears asking about applying the due date to all existing outstanding customer invoices.
Updating the default due date in your company settings:
You can set the default due date for all invoices in your company account from your Financial Settings, the new due date will only affect future invoices created. If you want to change the due date for existing invoices, you can press “Yes” when the automatic message appears asking if you need to update all existing outstanding invoices, which appears when changing the default invoice due date in your company settings. In this case, the new due date will apply to all future invoices that will have neither customer’s due date nor invoice due date and will also apply to the existing invoices that have due dates settings on the company level only. Invoices that have a due date on the customer level and the invoice level won’t be affected. For example, if you set your company due date to be 7 days, this means your default due date for all of your future invoices that don’t have a set due date on a customer level or an invoice level will be set for 7 days from the date of invoice creation. And if you select Yes when the automated question appears asking about applying the due date to all outstanding existing invoices, your current invoices that have company due date only will be updated to the new due date set up: 7 days.
Let’s check the steps required to set the different due dates on the invoice level, customer level, and company level.
How to set a due date for a specific invoice
From the side menu > Select invoices
Select the type of invoice you wish to view or select All Invoices
On the invoice overview click Actions
Select Set invoice due date from the popup menu
Select the due date you want to set for the invoice
- Please note that you will have an option from the due date dropdown menu to select “Custom due date” where you can add a specific date from the calendar to be the due date for this invoice*
Then click Save.
To set the default due date for a specific customer, please follow the following instructions:
From the side menu > Select Customers
Select All customers to view the customer’s list.
Find the customer you need to set the due date for, and on the customer overview click Actions
Click on the Set invoice due date from the action list, you can also do the same from the customer profile page.
Set the preferred due date from the dropdown menu and click save
Please note that you will only be able to select the due dates from the available options and you won’t have the chance to add a new number of days to be due after, but you can do that from Settings > Financial settings > Payment terms > Add new +
After clicking save, you will get an automated message “Do you want to update the due date for all existing outstanding invoices for this customer that are using this due date setting?”
No > The new due date will be applied only to all the future invoices of this customer.
Yes > The new due date will be applied to both the customer’s future invoices and the current invoices that have a company due date or customer due date.
To set the company due date, please follow the following instructions:
From Settings > Select Financial Settings > Payment terms
Select the radio button under the “Default” row to match the preferred “Due on” in the next row.
What are the available options for the invoice due dates?
You’ll have many choices to select from when it comes to set the due dates:
1- Booking start: If you select the first option, you will define that the invoice payments should be collected from your customers when the service starts, based on the first start date in your booking’s scheduled appointments.
2- Booking completion: So the customer is supposed to make the payment after the whole service is already provided and completed. This means the booking status must be converted to Completed before the invoice is due.
3- Select day: You’ll find “day of each month” next to “Select day” and that means you can select from the dropdown menu any day from 1 to 28 of every month to be the due date of the invoices.
- Please note that selecting “Booking start, Booking completion” when you set the company due date, categorize the new future invoices in the “open invoices” tab and the invoices become “due in 0 days” and that happens for the customers that don’t have customer due date*
Then there are other default options with the numbers “1,3,7,15,30” and a field next to the “Days after creation” to clarify that the selected number will be the due date counting from the day the invoice has been created. For example, if an invoice was created on October 6th, and the admin selected “3” from the due on’s list, the invoice due date for the customer will be October 9th because the due date was set to be 3 days after the invoice creation date.
How to customize a new due date
You can also customize new due dates other than the previously mentioned options “1,3,7,15,30” by following the next steps:
Click on “Add new +” under the “Due on” list.
“New payment period” window will appear.
Set the number of days you want in the “Due after” Field.
Select “Yes” or “No” to the “set as default” radio button, Yes will make the due date default for this invoice and No will just add the new number as one of the due on options so you can select it later.
*Please note that you will get an automated message after selecting any due date asking if you want to update the due date for all existing outstanding invoices that are using this due date setting and you can click on the “Yes, No” options*