Drafted by an AI agent for Kindly Remit. First published on Medium.
Most late invoices are decided before they are late. They are decided the day you send them, by four lines at the bottom that nobody reads, including, sometimes, the person who wrote them.
"Payment due upon receipt." Receipt of what, by whom? The invoice sat in a shared inbox for nine days. Was that receipt?
Payment terms are the only part of an invoice that does any work after you press send. Here is how to write them so the client's accounts team can act on them without asking you a single question.
Write a date, not a formula
"Net 30" means payment is due 30 days after the invoice date. Everyone in accounts payable knows that. Your client's office manager, who is also the person paying you, may not.
Put both:
Payment due within 30 days of the invoice date, by 4 December 2026.
The date does the work. "Net 30" invites a debate about whether the 30 days started when you sent it, when they opened it or when their manager approved it. A date on a calendar has no such debate. It also gives you something exact to quote later: "the invoice was due on 4 December" is a fact, not an opinion.
"Due on receipt" is not a deadline
"Due on receipt" sounds firm. In practice it is read as "whenever we next do a payment run". There is no date to be late against, so nobody feels late.
If you want fast payment, name a short period instead:
Payment due within 7 days of the invoice date, by 14 November 2026.
Seven days is short enough to be quick and long enough to survive one payment run. It is also a number your follow-up calendar can count from.
Say exactly how to pay
Every question the client has to ask you is a week added to the date. Put the payment details in the terms, in full, in a form that can be copied:
Payment by bank transfer to: [Account name], [Bank], sort code [00-00-00], account [00000000]. Please use [invoice number] as the reference.
The reference line matters more than it looks. Payments without a reference arrive, get matched to nothing, and you spend a morning proving that the £1,250 from "J SMITH LTD" was yours.
Name the person who answers questions
Questions about this invoice? Contact [Name, email, phone] within 7 days of receipt.
Two things happen here. The client knows who to ask, so the question comes to you now instead of to nobody later. And the "within 7 days" quietly closes the door on the dispute that appears on day 40, when someone suddenly remembers that the logo was the wrong shade of blue.
The late payment line (and what you can actually charge)
You do not have to threaten anyone. You only have to state, once, on every invoice, what late payment costs. Clients pay the invoices that cost money to ignore first.
Late payments may incur interest at [the statutory rate / X% per month] and a fixed recovery fee, in line with [our terms / applicable law].
What "applicable law" means depends on where you and the client are. In short, for business-to-business invoices:
- UK: the Late Payment of Commercial Debts (Interest) Act 1998 lets you claim interest at 8% above the Bank of England base rate, plus a fixed sum of £40 (debts under £1,000), £70 (£1,000 to £9,999.99) or £100 (£10,000 or more).
- EU: the Late Payment Directive (2011/7/EU) sets interest of at least 8 points above the European Central Bank reference rate, and a minimum €40 fixed compensation per invoice. Each country adds its own details (France, for instance, requires the late payment penalties and the €40 fee to be printed on the invoice).
- US: there is no federal rule for private businesses. What you can charge depends on your contract and your state's law, including limits on interest rates. Agree a rate in writing before the work starts, and check your state's rules.
None of this applies to consumers in the same way, and none of it replaces a word with your accountant. It is general information, not legal advice.
You will probably never charge the interest. That is fine. The line is there so the client's accounts team puts your invoice in the "pay on time" pile instead of the "pay when chased" pile.
A PO number, if they use them
Larger clients often cannot pay an invoice without a purchase order number on it. Not "prefer not to". Cannot. The accounting software rejects it, and nobody tells you.
If the client is bigger than about twenty people, ask before you invoice: "Do you need a PO number on the invoice, and who should it go to?" Then add it:
PO number: [12345]. Invoice sent to [accounts@client.com], copy to [your contact].
The whole block, ready to paste
Here are the four lines together. Fill in the [brackets] and put them at the bottom of every invoice, in the same place, in the same words.
Payment due within [14 / 30] days of the invoice date, by [date].
Payment by bank transfer to: [details]. Please use [invoice number] as the reference.
Late payments may incur interest at [X% per month / the statutory rate] and a fixed recovery fee, in line with [our terms / applicable law].
Questions about this invoice? Contact [name, email, phone] within 7 days of receipt.
Same place, same words matters. A client who has paid you three times knows where to look on the fourth.
And when the date passes anyway
Good terms reduce late payments. They do not end them. Somebody will still be on holiday, or changing accounting software, or simply sitting on it.
That is when the date you wrote pays off: every follow-up can count from it. Day +3 is a light "did this slip through?". Day +7 asks for a date. Day +14 mentions the terms you already stated, politely, because they were on the invoice all along.
We wrote the day +3 email and the follow-up calendar on one free page: Did this slip through? (free PDF). The payment terms block above is the first thing in our full Late Payment Kit, and the one we'd keep if we could keep only one.
Ask for a date, not for money. Then write the date on the invoice, so you never have to ask.
General information, not legal advice. Your accountant is still your accountant.
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