How does invoicing work?

A brief explanation of invoicing and payment terms.


How does invoicing work?

Unless you have agreed alternative payment terms with a customer, UK rules dictate they must pay you within 30 days of receiving your invoice for the goods or services provided.

Some businesses do operate a different model. One familiar scenario being larger companies requiring that smaller suppliers accept payment terms of 90 or even 120 days.

Some companies choose to offer clients discounts for early settlement or payment in advance. Increasingly, SMEs are going further to protect themselves from late payment, and are asking for invoices to be settled within as little as seven days.

The UK is fairly typical among its neighbours in Europe in its approach to invoicing, with payment terms of 30 days from receipt of an invoice being commonplace in most European countries. But this does vary:

  • Scandinavian businesses typically employ a payment deadline of 14 days.
  • Spanish firms set payment terms of 45 days on average, for example
  • Companies in Greece and Italy demand payment within 50 days or more.

How quickly invoices are paid often depends in part on how the document is issued. Manual invoices are slower both to deliver and to be processed at the other end. But modern, automated methods can ensure payments are made quickly and efficiently, even immediately.

‹ View table of contents Next page ›

Latest features

How to set up Direct Debit – a guide for small businesses in Australia

In this guide we'll look at how Direct Debit can help your business. We'll cover the advantages and disadvantages and show you how you can quickly start accepting customer payments this way.

Cash collection causing headaches? 3 ways to automate the way you take payments

Processing, chasing and reconciling payments doesn't have be time consuming. In this guide, we compare three automated payment methods, and identify the pros and cons of each, to help you choose the right one for your business.

How to stop wasting time on cash collection: Five hacks for SMB owners

Sending out invoices, collecting payments and reconciling cash are time consuming tasks – costing SMBs 120 hours a year. In this guide, we’ve highlighted 5 hacks to help your cash collection process run more efficiently.

View all


Reference guides

View all