How to Pay an Invoice? [10 Easy Tips to Follow]

To establish a consistent and streamlined approach to accounts payable, it becomes of prime importance for customers like you to pay an invoice on time.

There exist many strategies that you can apply to make the payment for invoices you receive from the service provider. But, we’ve highlighted the best tips on how to pay an invoice on time.

10 Essential Tips to Pay Invoice on Time

To ensure prompt and on-time payments of your invoices, there are certain tips and tricks to follow. Consider going through them and ensure that your invoices are getting paid faster:

1. Verify the invoices you receive

The first step that you need to take is reviewing all the invoices that you receive from the service providers and it’s just to maintain accuracy.

You need to check whether all the goods and services are billed accurately and received from service providers.
But, how to maintain accuracy?
It is done by reviewing:

• Orders that you received;
• Received orders to check whether it is aligned correctly as per your order;
• The cost mentioned in the invoice matched perfectly with your initial agreement with the service provider.

For more information, we highly recommend you read our blog on how to verify your invoices.

2. Never miss your payment due date

The invoices that you receive from your vendor must specify the payment due date. Tracking all due dates for your invoices is key to properly managing your expenses.

The service providers will include any late charges. So, if you are not paying on time, then you need to be ready to pay a late charge.

Pro tip: Record the due dates of all your invoices in your calendar or software to remind you to pay them on time.

On a spreadsheet or online accounting software, add a schedule for all upcoming payments and all other payment confirmation details along with the contact information.

When you create a payment schedule, double-check your added bank account or credit card details for smooth bank transfer.

Your invoice payment may be scheduled on a weekly or monthly basis. It depends on how many invoices you have to pay.

3. Select your preferred payment method

When you receive an invoice, the essential thing that you need to perform is to make a payment.

To pay an invoice, you can opt for the common payment method like:

• PayPal 
• Check
• Cash
• Debit/Credit card

Choose a preferred invoice payment method and make sure you have added all payment details that are essential so that you can easily make payment.

4. Keep records of payment confirmation

After paying an invoice for your firm, ensure that every proof of payment or confirmation of payment is kept.

Payment details such as a number assigned to you after making an online credit card or debit card payment must be available with you for future purposes. 

It is important to have payment records because your vendor may get confused about whether you have paid or not.

5. Establish a reliable system

To establish a reliable system, you should create a standard procedure for paying your invoice, right from the moment you get one to the date you make the payment.

You should file all your invoices in a way that doesn’t take your time to find any of them. Filing invoices can be done by either:

• Digital means such as a spreadsheet/software or 
• Physically with papers and files

However, since we are talking about reliability for making timely payments, the digital approach is the only way to go because:

• It is easily accessible from anywhere.
• It doesn’t demand any physical space.
• It is much easier to process.
• It provides more accuracy.

6. Pay the invoice in the pre-decided currency

Most often, you will be dealing with local vendors. So it’s a given that you need to pay with the local currency only.

However, the issue can arise when you are dealing with an overseas business. So make sure that you have agreed upon the currency in which you need to pay for received goods/services.

Then, as you schedule your payment, set the agreed-upon currency for paying the invoice.

7. Keep every detail of your vendor information

Properly storing the information of vendors you deal with can come in handy in situations such as:

• When you’re confused with the billing structure or 
• When you want new orders

So keep all your suppliers’ information in a centralized location online or offline to easily contact them in times of need.

8. Seek discounts

When you purchase from some vendors, they may indicate some dates when you pay and receive a certain discount.

This means that making early payments gives you a discount. If this is the case with your vendors, make sure to plan before receiving the invoice, so you get to pay the discounted price.

9. Have a detailed budget

To organize your accounts payable properly, you need a budget for your business.

With a detailed budget, you’ll know how much you have to pay each month and how much money you’ll have left.
To have a detailed budget, compare your past invoices and how much you spend each month on invoices and other expenses.

10. Keep your numbers on the positive side

Paying your invoice becomes harder and harder when your cash inflow is lesser than your cash outflow. Thus, you have to ensure a steady stream of income for your business.

Pro tip: Keep a financial reserve to tackle unexpected situations.

Keeping the numbers positive in your balance sheet gives you the confidence to go ahead strongly and increases your reputation in the market.

Conclusion

For records purposes, it is easy to change or lose paper invoices.

Going paperless is a good idea for small businesses and vendors. If you know that your vendor uses online invoicing software, always request digital invoices and online payment methods.

With online invoicing, you as the business owner can receive an invoice through email and document them in your cloud storage.