How to pay an invoice - methods, references and best practice

• Cash flow challenge: Sometimes I’m unsure about the best way to pay suppliers’ invoices, and I worry that mistakes or delays could affect relationships or add extra costs.

• Perfect for: SMEs and finance teams looking to streamline payments and avoid common mistakes.

Novuna helps businesses improve payment processes and access funding if cash flow becomes tight. We also compare finance options so you can stay in control of supplier payments.

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Common ways to pay an invoice

There are several common methods businesses use in the UK:

• Bank transfer (BACS or Faster Payments): The most common method, secure and quick for domestic payments.
• Direct Debit: Suitable for ongoing supplier relationships with regular payments.
• Debit or credit card: Useful for one-off purchases, though some suppliers add transaction fees.
• Cheque: Becoming less common, but still used by some businesses.
• International transfer (SWIFT): Required when paying overseas suppliers.

Why invoice references matter

Every invoice should have a clear payment reference, often the invoice number. Using the correct reference means suppliers can match payments to the right invoice quickly. Missing or incorrect references are one of the biggest causes of payment disputes.

Best practice for paying invoices

To keep payments on time and avoid issues:

• Check invoice details carefully: Ensure the supplier name, amount, and bank details are correct before making payment.
• Use the right reference: Always include the invoice number or purchase order number in your payment.
• Pay on time: Stick to agreed payment terms to protect supplier relationships and avoid late payment fees.
• Set up reminders: Use your accounting software to track due dates and avoid missed deadlines.
• Keep records: Store proof of payment securely for auditing and cash flow tracking.

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Managing cash flow when paying invoices

Sometimes paying invoices on time can put pressure on your own cash flow. In these cases, funding options such as invoice finance, working capital loans, or revolving credit facilities can help bridge the gap.

Novuna works with businesses to ensure payments can be made on time without straining cash reserves.

How Novuna Business Cash Flow can help

Paying suppliers on time strengthens your reputation and helps you negotiate better terms in the future. Novuna provides tailored finance solutions that allow businesses to stay on top of their invoices while keeping cash flow healthy.