Let’s say payment terms offered to a customer are 1% 10 net 30 and they have 3 open invoices. One of them is 10 days old, one 25, and one 40. Is it acceptable by standard terms for the customer to issue a payment with discount on the 10 day old invoice and leave the 25 and 40 day old invoices open?
Hi Andy, this is a great question and one that I have never been asked before.
So there is nothing wrong with a customer paying an invoice within the allotted number of days so that they can earn the early payment discount. However, what you should do is follow-up with a phone call to remind the vendor that they have two past due invoices.
In addition, you might want to consider charge finance charges on the outstanding balances. Check out our How to Manage Accounts Receivable article for tips and best practices on getting paid on time from customers: https://fitsmallbusiness.com/how-to-manage-accounts-receivable/.
All the Best-
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