What is an invoice and how does invoicing work?
Invoice payment terms outline to a client when the invoice needs to be paid by. They also outline the accepted forms of payments, whether that’s a credit or debit card, or BACS transfer, as well as late payment penalties.
Invoice payments terms in the UK should be agreed before you send your invoice to the customer. If a payment date hasn't been pre-agreed, the customer must pay you within 30 days of receiving your invoice or the service.
You are within your right to charge interest for a late payment and you can use a statutory demand to formally request payment of what you are owed.
What are the most common invoice payment terms in the UK?
The most common payment terms in the UK for invoices are as follows:
- PIA - Payment required in advance
- Net 7 - Payment required 7 days after the invoice date
- Net 10 - Payment required 10 days after the invoice date
- Net 30 - Payment required 30 days after the invoice date
- Net 60 - Payment required 30 days after the invoice date
- Net 90 - Payment required 30 days after the invoice date
- EOM - Payment required at the end of the month that the invoice was sent in
How do I get my invoices paid quicker?
Getting paid on time is essential to having a good cash flow within your business. In an ideal world, clients will pay their invoices within the agreed payment terms without needing a reminder, but most invoices end up needing to be chased. Here are a few tips to help you get paid faster:
1. Agree your payment terms before you start the work
This means there’s no confusion further down the line.
2. Record your time
Calculating how much time you’ve spent working when putting together your invoices can be time consuming and inaccurate. You can make your life a lot easier by keeping a log of your time as you work, and this also makes it easier to see if you’re over or undercharging your client.
3. Ensure your invoices aren’t confusing
Any confusion could result in a delay to your invoice being paid, so it’s important to detail any work in a way your client will understand, as well as including your company logo and details so they know who it’s from.
4. Send the invoice to the person paying it
This might sound like common sense, but you don’t want it to get lost in someone else’s inbox and risk a delay in your payment.
5. Send your invoice as soon as possible
The sooner you send your invoice, the sooner it will hopefully be paid.
6. Keep communicating
Overdue reminders, account statements and phone calls help keep a consistent line of communication regarding your invoice and will ensure it is paid sooner.
7. Overdue fees
Making a client aware of your overdue fees upfront will hopefully kick them into action when a payment deadline is looming. If they ignore these terms, you are entitled to charge interest, but this might not always be good for your client relationship.
Have you thought about Invoice Finance as a cash flow solution for your business?
Invoice finance allows you to release cash quickly from your unpaid invoices.
As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available to businesses depending on the situation and the level of control they require in collecting unpaid invoices.
We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our Confidential Invoice Discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.
The benefits of invoice finance companies such as Novuna Business cash flow
Want to understand more Cash Flow Finance terms?
Our Cash Flow Resource Hub has been set up to help SME's with cash flow finance advice, tips and resources to help with their cash flow position.
We explore ways you can begin improving your cash flow situation and start getting your business on track to positive cash flow.
Competent staff, slick technology. Would recommend
Halo is one of the smartest bits of tech I have seen & every team is only as good a it's people and I would like to take this time to actually specifically point out Alex Hall & Claire Davies. Alex is an account manager that has continually improved during our time working together and is a real credit to Novuna. Claire has been exceptional from start to finish; meticulous in her work and very patient with us at every temp - an absolute star. It is a shame that the email address went to a generic platform and not each individual. I totally understand why this works better for companies but it did mean that the personal element was lost meaning that starts like Claire will be harder to identify from a customer point of view.
High recommedation for Novuna Business Cashflow.
My company was in need of invoice factoring to assist with the cashflow due to the nature of debtor days with our clients. After looking at a number of options, the right decision was made to work in partnership with Novuna Business Cashflow. Right from setup through sales to customer service, the communication and support has been outstanding. Providing me with all the information I needed regarding new clients coming onto our books. The system they use is so user friendly and the drawdown payments are very efficient in the fast moving world of temporary payroll. This has allowed my company to look at positive growth knowing we are safe financial hands. I would highly recommend Novuna Business Cashflow 10/10.
Set up went well and communication was good.
Syed and Vipul were extremely helpful top class service
Very helpful from the start
Great people made this process very straightforward.
Jemma from Novuna (formally Hitachi) was brilliant. Worked with us throughout the process and succeeded when some others had failed. Carried out the necessary checks with a smile and cheery demeanour, making what would have been a laborious process quite manageable.
Teething problems -Maybe ?
It's still early days so I may alter this review at a later date. However with retentions and concentration limits and other items, were finding were not getting 85% up front, were probably getting nearer 70% Also when a customer pays the remaining allegedly 15% due to us seems not to be credited to become available. For instance a customer paid Â£6918 and a customer paid Â£1300 hence we should see an extra Â£1330 available (15% of both these payments). However availability seemed to go down and not up by Â£1330 !!! Hard to work out where this 15% has actually gone ? I'll re-submit this review when things become clearer.
I found Hitachi true to their world in every aspect of the service they promised. I can't recommend enough.
Excellent Customer care and service.
Excellent customer service from start of initial conversations, right through to finally becoming a customer. The whole team involved are a credit to Hitachi, they were accommodating and informative the whole way along the process. I would highly recommend Hitachi to future clients and business associates. Thanks Alan.
I really enjoyed working with the Hitachi team, professional, helpful and really good people to deal with. They have made what could have been a very difficult experience a pleasure. Very happy to recommend them.
Hitachi made the process of moving factoring facilities painless, bearing in mind we previously had our facility with the same provider since 1997. I cant fault Hitachi's staff and processes and we are delighted with the move.
Staff excellent all together professional
Great service so far
From start to finish the process for transferring our invoice finance to Hitachi has been been brilliant, a smooth transition, great communication our link Person Jonathan Oakes has helped the process go through seamlessly, A great experience so far and a brilliant start to what we hope will be a long term partnership.