Knowing how to calculate invoice due dates correctly saves your company money on late fees and lost discounts. Missing due dates on a regular basis can also hurt your company's credit rating, making it harder to get financing in the future. Each vendor may have its own payment terms, so you must check the invoices individually.
The vendor should list its payment terms somewhere on the face of the invoice. Straight billing terms with no discounts are typically noted as "Net" and the number of days until payment is due. For instance, "Net 30" terms indicate that the net amount of the invoice is due 30 days after the invoice date.
Some vendors offer discounts for paying an invoice early. The terms for these invoices include the percentage of the discount and the applicable time frame. If the vendor grants a 2 percent discount for paying a Net 30 invoice within the first 10 days, the terms will be listed as "2% 10/Net 30." Make sure to allow time for the payment to arrive at the vendor's office.
Making the Calculation
Start with the date printed on the invoice, not the day you received it in the mail. For example, an invoice that is dated April 15 with "Net 30" terms would be due on May 15. If the terms are "2% 10/Net 30" and the invoice amount is $1,000, you can pay only $980 if you pay it before April 25.
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