Create a customized terms template to set clear net payment terms and automatically apply late payment fees to overdue invoices. This feature simplifies your billing process, promotes timely payments, and ensures consistent enforcement of your payment policies.
Here’s how it works:
It allows you to set a specific number of days after which a late payment fee will be added.
For example, if the payment term is to pay within 30 days, a 10% late fee will be imposed if unpaid.
After 30 days of non-payment, the system will automatically add a 10% late payment fee as a line item.
The term due date specifies the number of days until a late payment fee is applied to the invoice.
The due date is calculated by adding the term due date to the invoice date.
Example: If the invoice date is January 1 and the term is Net 15, the payment is due in 15 days on January 16.If payment is not received by the due date, a late payment fee will be automatically added as a line item to the invoice.
The late payment fee can be applied as either a percentage of the invoice balance or a fixed amount.
How to Create your Payments Terms Template
1. Go to your Settings.
2. Select the 'Templates'.
3. Click on the 'Payment Terms' template type.
4. Click the '+ Add New' button and you will see an empty template.
5. You can now start entering the payment terms such as:
Term Name: Typically labeled as Net 30, 60, or 90, indicating the payment deadline.
Term Due Date: The number of days from the invoice date until the payment is due.
Late Payment Fee ($ or %): A fee, either a fixed amount or a percentage of the invoice balance, that will be added as a line item if payment is not received by the due date.
Terms: The payment terms displayed on the invoice for the customer’s reference.
Please note that leaving the 'Term Due Date' and 'Late Payment Fee' fields blank will automatically convert the template into a regular term template with no due date and no late payment fee.
6. When you are done, click 'Save'.
Using Your Payment Terms Template
Now that you have your payment terms template, you can start applying it to your invoices and estimates.
Applying it on your Invoice / Estimate
1. Click on the ' + ' above your calendar to create a new invoice or estimate. In this example, we will create a new invoice.
2. Fill out the invoice and on the 'Terms' section of the form add a template by click the 'Insert' and select the template that you want to apply.
You can hover over the items to view the template terms and click use template to apply it to your invoice.
If you want to create a new template, simply click on '+ Add New Template,' and the 'Add New Terms' modal will pop up. Fill out the fields, save, and you'll be able to use it right away.
Assigning Payment Terms to a Customer Location
You can assign a payment terms to a customer's location as well. This will automatically apply to invoices that is assign on that location.
1. Open the customer's account and navigate to Locations tab.
2. Edit the location and click the dropdown for the 'Payment Terms' section.
Please take note of the limitations of payment terms:
The late payment fee will not be updated on existing invoices if a term template assigned is updated or deleted.
Late payment fees will not be applied to invoices created with a past date.
You cannot change the payment terms on an invoice that has a partial or paid status
Due date is based on invoice date.
The auto-applied late fee on an invoice will not update, even after editing the invoice, such as adding a line item or updating the item amount.