Time limits for issuing invoices
Whether you prefer to invoice after a job is completed, or just flat out forgot to issue an invoice, you may be asking “how late is too late”?
This article explores the best practices when it comes to invoicing retrospectively, and if there are any time limitations for the invoice to remain valid.
Ensuring that your invoices are raised on time will not only help you maintain an even cash flow and keep accurate records, but it will also help you get paid sooner.Start invoicing for free
You won’t receive payment until you’ve issued an invoice. So, if you want to receive your hard-earned cash, it’s best to invoice as soon as possible.
If you’re a bit forgetful, there are several time management applications that can help keep you on track. You may also consider hiring an accountant or bookkeeper to help you with your billing and accounting.
Regardless, if you forget to issue an invoice, you may be worried that it’s too late and you have lost out on the money. The official rule in the UK is that you are able to chase unpaid debt from up to 6 years in the past.
That being said, if it’s been several months from the end of the job and you forgot to issue an invoice, it would be courteous to speak to the customer to advise them what has happened and apologise for the inconvenience.
If the customer disputes the payment, you’ll need to make sure that you have proof that the service or goods were provided.
So you’re going through some previous paperwork and realised that you never collected payment on an old invoice - what now?
Well, since you issued the invoice but forgot to follow up, it’s technically a fault on your end. However, since it’s genuine debt that you’re owed, you can still chase the payment up to 6 years after the fact.
Again, it would be polite to explain to the customer what has happened and that you are sorry for the delay. You are, however, entitled to payment even if the invoice is long overdue.
In the UK, you have a statutory right to apply late fees to invoices that have not been paid on time. However, if the fault is on your end by not following up, then you may want to consider if it’s worth it to potentially lose the customer and receive a negative review.
If the late payment was the customer’s fault, for instance, their payment team had billing issues, then you’re perfectly within your rights to apply interest or late fees.
You can find more information on the amount of interest you can apply, as well as fixed costs on late payments on the UK Government website.
Yes - it’s certainly possible to modify the invoice after the goods or services have been supplied.
To do this, you can cancel the original invoice by issuing a credit note. Then, you can create a new invoice with the modified information and send it along to the customer.
A little tip: Contact the customer prior to cancelling and modifying the invoice so they’re not surprised to receive the credit note and reissued invoice.
Put simply, you should issue the invoice as soon as the service is completed or the product is delivered.
The sooner you issue the invoice, the more likely it will be on the customer’s mind, and the quicker they’ll pay the amount due.
Although it may seem polite and less greedy to wait a few days to issue the invoice, allowing too much time may cause you or your customer to forget and ultimately cause you more issues.
Luckily, invoicing software, like SumUp Invoices, can help you issue and send an invoice in under a minute and also help process payments to make it a seamless process from beginning to end.
Invoices must always include the invoice date as well as the due date. Setting a due date encourages the client to pay you within a certain time frame.
The general rule is 30 days from the invoice date. However, you can discuss this with your customer and either make it shorter or longer than 30 days. Regardless of what you agree upon, the payment terms and the due date should be clearly stated on the invoice.
When entering a due date on an invoice, try to avoid ambiguity by following these simple steps:
Be very clear on the payment terms: Instead of writing ‘end of the month’ or ‘last working day’, try to be more specific, for instance, ‘30 days from the invoice date’.
Write the full due date: Instead of writing ‘March 31st’, write ‘March 31st, 2021’ or ‘31/03/2021’. This will avoid any confusion or disputes.
Make sure the invoice date of issue is also written in full.
Write any additional payment terms on the invoice (e.g. late fees), or attach them to the email along with the invoice.
Invoicing and accounting isn’t generally the most exciting aspect of running a business, however, it’s extremely important. Invoices are official business documents and require specific invoice fields to be valid. That’s where invoicing software comes in.
Invoicing software like SumUp Invoices, allows you to create professional and compliant invoices in under 1 minute. The software ensures that all of the required information is input for you.
Invoicing software not only helps you create and send invoices but also quotes, payment reminders and credit notes.
Payment reminders are a great way of reminding your customer that the invoice needs to be paid. It’s a simple document that you send to the customer advising them that the payment is overdue.
You should issue a payment reminder a few days after the invoice becomes overdue. With invoicing software, there are built-in templates that you can use, or you can create your own.
Invoicing software not only helps you to create invoices, but it can also allow you to accept payments from your customers.
If you choose the payment link option, your invoice emails will include a “Pay Now” button which will take the customer to a secure webpage to enter their credit card information.Start invoicing for free