Getting paid on time is one of the biggest benefits for small businesses and the payment terms you set can make a huge difference. QuickBooks Online makes this part of the process much easier by letting you set clear payment terms for every customer and invoices. Whether you prefer Due on Receipt, Net terms and your own customer payment terms then QB gives you tools to keep expectations clear or avoid confusion. In this blog, we’ll discuss QuickBooks Online payment terms, common payment terms available in QBO and the importance of it in detail.
What are QuickBooks Online Payment Terms?
QuickBooks Online payment terms are conditions which you set to let customers know when their invoice is due. That terms explain how long a customer has to pay you after you send an invoice. Setting payment terms helps keep your billing process consistent and reduces misunderstanding with customers. When your every invoice clearly shows the expected payment timeline then it becomes much easier to track who owes you money and when you should follow up. QuickBooks uses these terms to organize your accounts and send reminders.
Common Payment Terms Available in QuickBooks Online
Here are some common payment terms which are available in QuickBooks Online, mentioned below.
Due on Receipt
This term means the customer is expected to pay as soon as they get the invoice. There is no grace period when payment is due right away. So many service providers and freelancers use this when they want to avoid delays and when the work has already been completed.
Net Terms (Net 7, Net 30, Net 60, Net 90, etc)
Net terms are some of the most commonly used options. They simply indicate how many days the customer has to pay after the invoice date.
For example
- Net 7: It gives customers 7 days to make their payment.
- Net 30: It gives customers 30 days to make their payment.
- Net 60: It gives customers 60 days to make their payment.
- Net 90: It gives customers 90 days to make their payment.
End of Month
Some businesses prefer to choose the end of month (EOM), the invoice is due at the end of the same month the invoice was issued. This is useful if you want a standard due date at the end of every month which makes it easier for you to manage payments.
Early Payment Discount Terms
Some businesses like to encourage quicker payments by offering a small discount. While QuickBooks does not always have this option built in, you can still create custom terms or add the discount manually.
Custom Payment Terms
QuickBooks Online also lets you create your own payment terms. You can choose a specific number of days that fit a special agreement with the customer.
Why are QuickBooks Online Payment Terms Important?
QuickBooks Online payment terms play a big role in keeping your business run smoothly. They set clear expectations between you and your customers so that everyone knows exactly when a payment is due. Clear payment terms also protect your cash flow. When you know when money is coming in then it is easier to plan for expenses, pay your bills on time, and manage day-to-day operations. Consistent terms also help you maintain a professional relationship with customers because they show that your business has a structured and reliable billing process.
How to Set Up Payment Terms in QuickBooks Online?
Setting up QuickBooks Online payment terms is a very simple process and these terms will appear automatically on your invoice. Here we guide step by step to set up QuickBooks Online payment terms which are mentioned below.
- Step 1: Open QuickBooks Online and click the gear icon in the top right corner.
- Step 2: Under the Lists section, select All Lists.
- Step 3: Then click on Terms to view all your existing payment terms.
- Step 4: Now add a new term, so select the New button.
- Step 5: Choose whether the term like Net 30, Due on Receipt and End of Month.
- Step 6: Enter the number of days or details you want for the new term.
- Step 7: Click Save to add it to your list of payment terms.
- Step 8: Apply the new term to customer profiles or select it while creating invoices.
Conclusion
In conclusion, we hope this blog helps you to understand QuickBooks Online payment terms easily. QuickBooks Online payment terms help you stay organized, set clear expectations, and get paid on time. By choosing the right payment terms that fit your business which make invoicing smoother. If you have any queries then contact our expert QuickBooks ProAdvisor team to solve your queries.