It is quite common to invoice a customer with terms of “30 days or nett monthly account”. Small customers will be expected to pay within 30 days, while large customers will be expected to pay at the end of the month following the month of the invoice, so an invoice sent in September 2019 would be settled by Thursday 31 October 2019. Obviously, the average settlement time will be 45 days, but this is OK if the customer’s credit is good.

Large companies insist on doing it this way because they may receive several invoices from a supplier during a month, and will want to settle all of them with a single payment when they do their monthly computerised cheque run. It would therefore be a good idea for the supplier to have sent a statement at the start of October listing all outstanding invoices. Typically the cheque run would be about the 25th of the month, which is today.

If you give credit and have debts to collect, then you might like to have a discussion with us. Most accountants are also general business advisors as well. Some large companies rely upon a cynical calculus of bargaining power when they take ages to settle invoices, and you need to know what to do about this.

The “nett” in “nett monthly account” has “net” as an alternative spelling.