A payment due date is the latest time a customer has to pay for a product or service - typically stated on an invoice. In many accounting systems, this is also referred to as the 'due date'.
In practice, payment terms play an important role in the relationship between customer and business - especially when credit is granted. The company delays the receipt of payment, which always carries a certain risk that should be managed strategically.
What is the difference between payment due date and payment date?
Two terms that are often confused are payment deadline and payment date. However, it is important to distinguish:
- The payment deadline is the latest time the customer must have made the payment.
- The payment date is the day the customer actually pays - which in some cases can be later than the deadline.
If the customer meets the deadline and pays on the due date, the payment is generally on time - even if the money only arrives in your account one or two business days later due to banking days.
Rules and framework for payment deadlines
There are no set rules for how long a payment deadline should be, but it depends on the agreement between the parties. Many companies operate with 7, 10, 14 or 30 days - often determined by industry practice or individual agreements.
Hvis ingen frist er aftalt, træder renteloven i kraft, og så skal kunden betale senest 30 dage efter at have modtaget fakturaen.
What happens if the customer exceeds the deadline?
If payment is not received after the agreed deadline, you as a business have the opportunity to take action. You can:
- Send reminders (with or without fee)
- Charge interest and possible compensation fee (for B2B)
- Overveje næste skridt, fx inddrivelse eller kreditstop
However, you may only send reminders or initiate collection proceedings after the payment deadline has passed.
Business considerations: Short vs. long payment terms
At tilbyde kredit og dermed en længere betalingsfrist kan give dine kunder fleksibilitet og styrket likviditet – hvilket ofte kan være et konkurrenceparameter.
Men der følger også risici med. Jo længere frist, desto større er sandsynligheden for forsinket betaling eller misligholdelse. For at håndtere denne risiko anbefales det at foretage kreditopslag og eventuelt anvende kreditovervågning, så du kan agere hurtigt, hvis kundens økonomi ændrer sig.
Using payment terms in practice
Examples:
- For cash sales: Payment is typically made upon delivery - the deadline is "now".
- For invoice sales: You set a specific payment deadline, for example 14 days from the invoice date.
- No grace period: Payment must be made within 30 days of receipt (see Interest Act).
Either way, it's a good idea to make the payment deadline clear on your invoice - and have clear internal procedures if the deadline is not met.
