In other words, when you state your terms for payment, make sure they're something your customers will recognize. For example, most manufacturers expect 30-day payment terms, whereas the construction industry typically settles for 60- or 90-day terms, and government agencies prefer 90- or 180-day terms. As you can see in the image below, the example shows several payment term elements such as business name, invoice amount, and accepted payment methods.

Typically, businesses on retainer agreements issue invoices to clients on a recurring basis. Software like QuickBooks enables customers to pay online anytime with pay-enabled smart invoices. With smart invoices, customers can pay using credit cards, debit cards, and automated clearing house (ACH) bank transfers. Automating invoicing for recurring payments can help in these situations. Contract payment terms are important because knowing how much money is going to hit your account and when is essential to accurate cash flow projections. Accurate cash flow projections help you plan for taxes, keep your business running smoothly, manage business growth and monitor if you receive payments on time.

What Payment Terms Should Be Included on an Invoice?

EChecks, electronic alternatives to paper checks, are now commonly used to make online payments. Let’s explore the payment options and payment processing tools that may fit your company. Forwardly, which helps American small businesses accept and send instant payments 24/7. Nick Chandi is the CEO of Forwardly, which helps American small businesses accept and send instant payments 24/7. Notes receivable appear as a current asset on a balance sheet if expected within 12 months.

To help, we’ve compiled a list of common business finance terms and definitions that you may find while reviewing your small business’ financial statements. Use it as a reference while you’re working with financial experts like your accountant or while going over your books each week. It also gives other staff the freedom to serve customers wherever they are in the store, small business payment terms as they don’t need to be connected to a POS terminal to process transactions. MST technology works with most NFC-enabled hardware that accept contactless payments, which means that so merchants don’t need to update their point of sale systems. For example, if you have a regularly on-time paying customer, you might offer them a Net 60 term instead of a Net 30.

Fees and Overall Cost

Different industries have payment term norms that customers expect. Some quick research could give you greater insight into your industry’s standards. For example, it's common for a wedding vendor to request installments throughout the booking process.

• Let’s compare several online payment processors for small businesses.
• It can also encourage repeat business since customers are more likely to return to a company they trust.
• It gives a reasonable leeway for the customer to pay large purchases.
• Maintaining open communication with clients throughout the billing and collection process is crucial.
• For instance, Net 30 (or N/30) means that a buyer must settle their account within 30 days of the date listed on the invoice.