Invoice Payments: How They Work, Terms & Best Practices 2025

Getting paid should be simple, but many small businesses run into delays between sending an invoice and receiving the invoice payment. Customers miss the payment due date, use the wrong invoice payment method, or wait for extra details that weren’t included. These are all issues that slow cash flow and create unnecessary back and forth.

A clear invoice payment process prevents most of this. When customers understand how to pay an invoice, see the total amount due, know the accepted payment methods, and have a realistic number of business days to settle the balance, payments arrive faster and with fewer errors. 

Modern invoicing and payment software helps even more by offering online checkout options, automating reminders, and reducing outstanding invoices. Research from PYMNTS shows that 88% of firms say integrating automation improves payment processing speed, helping reduce delays and strengthen B2B payment workflows.

This guide will cover:

• what an invoice payment is (in practical terms)
• how the full invoice payment process works
• the most common invoice payment methods
• examples of invoice payment terms you can use
• how to structure a clear payment footnote
• how partial payments, recurring payments, and online payments fit in
• what an invoice payment receipt must include
• how to streamline invoicing and payments with modern tools
• best practices for reducing outstanding invoices and getting paid faster

If you’re drafting invoices from scratch, you can start with the free invoice generator, and if you need to follow up with customers, our payment reminder templates take care of the heavy lifting.

What Is an Invoice Payment?

An invoice payment is the amount a customer sends after receiving an invoice for products or services. Once the business issues the invoice — detailing the goods and services, total amount due, payment instructions, and due date — the customer is expected to complete the payment of an invoice using one of the business’s accepted methods.

The payment may be:

• full: when the customer pays the entire amount
• partial: when the agreement allows installment billing
• recurring: when payments occur on a schedule
• online: via credit card, ACH, or a hosted checkout link
• manual: through wire transfer, bank deposit, or check

Regardless of method, the invoice serves as the official request, and the payment completes the transaction.

Invoice Payment vs Invoice Receipt

These documents are not interchangeable:

• The invoice for payment is sent before money is exchanged.
• The invoice payment receipt is sent after confirming the payment has been processed.

If you want to better understand how other documents compare, see our guides on:

• Invoice vs Bill: What’s The Difference?
• Invoice vs Receipt: What’s The Difference?

Example of an Invoice for Payment

A clean payment invoice format will include:

• seller and customer details
• a description of the products or services
• line-item pricing
• tax, fees, and total amount due
• payment invoice terms (Net 15, Net 30, etc.)
• instructions for credit card payments, ACH, or wire transfer
• references to purchase orders, if used
• any notes or a payment footnote

You can build one easily using our free invoice templates or free invoice maker.

How the Invoice Payment Process Works

The invoice payment process covers everything that happens between sending the invoice and receiving the payment. Smooth processes reduce confusion, speed up payments, and prevent outstanding balances.

Step 1 — Customer receives the invoice

Whether delivered by email or through invoicing and payment software, the customer receives a clear breakdown of what’s owed.

Step 2 — They verify items, totals, and POs

Customers confirm the invoice matches their purchase order, agreed pricing, or completed work.

Step 3 — They review the payment terms

This includes:

• how many business days they have to pay
• the payment due date
• accepted payment methods
• early-payment discounts
• late-payment fees
• any notes about partial payments

Step 4 — They choose a payment method

Depending on your accepted methods, customers may pay via:

• wire transfer
• credit card payments
• ACH / bank transfer
• online checkout link
• check

Step 5 — Customer sends the payment

This completes the invoice payment procedure, unless partial payments are allowed.

Step 6 — Business sends a receipt

A proper invoice payment receipt includes the amount paid, date, method used, and remaining balance if applicable.

For timing guidance, check out: When To Send Invoices.

Invoice Payment Terms (with Examples)

Clear invoice payment terms reduce confusion and speed up collections. They tell the customer:

• how long they have to pay
• which payment methods you accept
• whether partial payments are allowed
• what happens if payment isn’t received
• applicable fees or interest
• which business days count toward deadlines

Here are common examples:

Net 30 Invoice Payment

Payment is due within 30 days of the invoice date.

Net 15 Invoice Payment

Suitable for shorter projects or high-volume customers.

Due on Receipt

The customer pays immediately, often used for digital goods or urgent work.

End of Month (EOM)

Payment is due at the end of the current month.

2/10 Net 30

A 2% discount is offered if the customer pays within 10 days.

Invoice Payment Methods Explained

Customers may complete payment by invoice using several methods. Offering multiple options increases the chances you’ll be paid quickly.

1. Wire Transfer

Common for large invoices or international clients. Fast, reliable, and traceable.

2. ACH / Bank Transfer

Low-fee option ideal for recurring payments.

3. Credit Card Payments

Convenient for clients and easy to process when using online invoicing and payments.

4. Online Invoice Payment

The fastest option. Customers pay using a hosted checkout directly from the invoice.

5. Check Payments

Slower but still standard in some industries.

Invoice Payment Footnote and What to Include

A payment footnote invoice appears at the bottom of the document and typically includes:

• notes on acceptable methods (e.g., “We accept ACH, cards, and wire transfer”)
• bank or routing details
• transfer instructions
• processing windows (“allow 1–3 business days”)
• reminders about early-payment discounts
• late fee details
• PO or reference number instructions

This short section prevents guesswork and helps customers pay correctly on the first attempt.

Invoice Payment Receipts

Once the customer pays, the business issues an invoice payment receipt. Accurate receipts support compliance with IRS recordkeeping requirements. This confirmation should include:

• invoice number
• payment date
• amount received
• payment channel (ACH, card, wire)
• remaining balance, if partial payments were made

Pro Tip: You can generate receipts automatically using our free receipt generator.

Invoicing and Payment Software: Why It Matters

Modern tools handle online invoicing and payments, automate reminders, and help customers pay faster. Systems like Invoice Fly allow businesses to:

• send an invoice in minutes
• enable online invoice payment processing
• support recurring invoice schedules
• track partial and full payments
• view outstanding balances
• sync with accounting software
• reduce manual steps that often cause delays

This eliminates confusion, reduces late payments, and gives both sides a more predictable workflow. Try Invoice Fly’s  free online payments software for free today!

Best Practices for Faster Invoice Payments

1. Automate reminders

Many customers simply forget. Automated reminders ensure they see the invoice again before it becomes overdue.

2. Offer at least two payment methods

A mix of card and bank options increases the likelihood of being paid on time.

3. Include clear payment instructions

Use a straightforward payment invoice template that lists details, deadlines, and accepted options.

4. Use online payments whenever possible

Card and ACH checkout links drastically shorten turnaround time.

5. Integrate with accounting software

This prevents manual errors and keeps financial records clean and compliant.

Ready to Get Your Invoice Paid?

A smooth invoice payment experience comes down to clear terms, simple payment options, and tools that remove the manual work. When customers know exactly how to pay (and can do it online) payments come in faster and with fewer issues.If you want a more reliable way to send invoices, collect payments, and keep everything organized, Invoice Fly’s invoicing software and online payments make the entire process easier for both you and your customers.