Explained
The clock starts on the invoice date, not the day it arrives, unless something else was agreed. Terms longer than they need to be finance the customer out of your own cash, and terms nobody follows up are terms in name only — what collects money is not the printed term but the chasing that follows it.
Example
An invoice dated 1 March on net 30 is due on 31 March and overdue on 1 April.
Related terms
- InvoiceAn invoice is the document in which a seller asks a buyer for the price of what was delivered, listing the items, their quantities and prices, the tax and the total due.
- Accounts receivableAccounts receivable are the amounts customers owe a business for invoices issued but not yet collected.
- Cash flowCash flow is the money that actually came in and went out over a period — which is not the same thing as profit.