Does the net term clock start at invoice date or invoice-received date? What’s most common? What are some key concerns one should consider if planning to change from starting net-term clock from invoice date to invoice received date?

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According to TAPN benchmark data, the most common practice among organizations (74.8 percent) is to begin the net term clock from the invoice date. Just 12.6 percent of organizations begin the clock when the invoice is received. The least likely practice (3.7 percent of organizations) is to begin the clock according to product receipt date.

After looking closely at the data, these numbers appear consistent for each industry. A majority of organizations in all industries across the board begin their term clock on the invoice date.

There are some concerns you must address if you plan to switch from beginning the clock on the invoice date to beginning the clock when the invoice is received. These include making sure you have worked with purchasing and informed them of the change, and making sure your vendors have been notified, as switching to invoice receipt date could mean your vendors will receive payment later than they traditionally have.

For information on extending payment terms, check out the TAPN Article Recession-Proof Your Accounts Payable Department

Also, here is a link to the TAPN Disbursement Benchmark Survey that includes data on net term clocks.

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