Concept Definition
What is a payment due date?
A payment due date is the date by which a buyer must settle an invoice. It is derived from the invoice date plus the agreed payment terms (e.g., net 30, net 60). The due date affects cash flow, early payment discount eligibility, and late payment interest calculations.
How is the due date calculated?
The due date is typically calculated as invoice date plus the payment term in days. Variations include end-of-month terms and specific calendar-based terms:
- Net 30: Payment due 30 calendar days from invoice date.
- Net 30 EOM: Payment due 30 days after the end of the month in which the invoice was issued.
- 2/10 Net 30: 2% discount if paid within 10 days; full amount due in 30 days.
- Immediate: Payment due on receipt of invoice.
Frequently Asked Questions
- Is the due date a mandatory field on an e-invoice?
- In Peppol BIS Billing 3.0, the due date (BT-9) is conditional: it is required when payment terms are present. In UBL, it is an optional field. However, for effective AP automation, including the due date in structured format is strongly recommended.
- What are EU rules on late payment?
- The EU Late Payment Directive (2011/7/EU) establishes a maximum 60-day payment term for B2B transactions (30 days for public authorities) and entitles creditors to statutory interest on late payments. Late payment interest in the EU is calculated at the European Central Bank reference rate plus 8 percentage points.