Payment terms: when an invoice is due
Payment terms say when you expect to be paid. Work out due dates and see how the terms change the month the cash arrives.
This path is practice in how the records and the sums work. It is not tax advice. Any rate or allowance in a question is an example for that question, so check GOV.UK for the current figures.
Task 1What the terms mean4 questions
Payment terms say how long the customer has to pay. Agree them before the work starts and print them on the invoice.
- Due on receipt
- pay as soon as the invoice arrives
- 14 days
- pay within 14 days of the invoice date
- 30 days
- pay within 30 days of the invoice date
To find the due date, count the days on from the invoice date. If you pass the end of the month, take away the days in that month.
Task 2Terms and your cash4 questions