Business Finance

How to Pay an Invoice

Mar 13, 2021 • 6 min read
Businesswoman looking at invoices
Table of Contents

      An invoice is a document sent from a business to a customer indicating products sold or services executed (or agreed upon). 

      The document will often include client and business information such as logos, addresses, and contact details in addition to transactional information like the type of products or services, quantities, and scope. The invoice is essentially a bill, and it will often include payment terms, timelines, and other information.

      Keep reading to learn more about how to pay an invoice.

      Receiving Invoices From Businesses

      Every business handles invoicing differently. Some utilize invoicing software to streamline the management and tracking of paid and outstanding invoices, while others prefer creating and mailing an invoice by hand. Some businesses invoice with strict payment terms, while others provide more flexible timelines and payment options.

      Simply put, you can receive many different types of invoices through various methods. While the invoice itself may be unique, there are only 2 channels to receive an invoice.

      • Online: More recently, businesses are choosing to move their invoicing online for simplicity and cost savings. The most common way to receive an online invoice is via email. However, you’ll likely be directed to an online portal to pay that invoice. Many of these client portals will allow you to review and manage outstanding and paid invoices
      • Offline: While online invoicing solutions are becoming more and more popular, some small businesses still prefer tangible invoices. You may receive invoices from local businesses by mail or in-person after a project is completed.

      When Should You Pay an Invoice?

      Paying bills on time is an important step in maintaining good relationships with businesses and vendors. If you’re frequently late on payments, the business may decide to charge you more—or to drop you entirely. If you operate in the business-to-business (B2B) space, losing a good vendor can cause bottlenecks and quality control issues throughout your business. So always pay your invoices on time.

      Payment terms are often discussed before work is started and will often be outlined within the invoice. For many industries—especially B2B—it’s possible to have payment timeframes that extend weeks or even months after the work is completed or products delivered. You may also be able to negotiate discounts for up-front or early payments if the business struggles with cash flow or delinquent payments.

      Most invoices will include phrasing like “payment date” or “net-payment terms” that indicates the deadline for paying an invoice. Net-payment terms are often used to express a timeframe or window to pay an invoice within. For example, if you have an invoice with net-15 terms, it means you have 15 days from the time you received that invoice to pay the balance.

      If you received an invoice with no payment terms outlined, the typical timeframe of 30 days should be assumed.

      How to Pay an Invoice Online

      The physical process for paying an invoice online will vary based on the invoicing or payment processing software the business uses. Typically, it will flow like this:

      1. Open the email with the outstanding invoice.
      2. Look for a button that directs you to “Review and Pay Invoice.”
      3. Confirm that all the information is accurate.
      4. Find the button or area on the page that directs you to pay.
      5. Input your credit card information or complete other payment method requirements.
      6. Confirm that the payment amount matches the invoice and what you agreed upon.
      7. Submit the payment and receive the receipt.

      Paying invoices online is usually a seamless process. Best of all, most businesses allow for flexible payment methods. Some of the common ways to pay an invoice online include:

      • Credit card payment: The most common way to pay an invoice online is by credit card. While most businesses will allow any type of credit card, you’ll want to confirm beforehand—some businesses do not accept credit cards like American Express or Discover because of their increased fees to companies.
      • Bank transfer (ACH): Another popular method for paying an invoice online is to pull it directly from your bank account via ACH. If you can afford to pay with ACH, you can often use this fact to negotiate lower rates with businesses. ACH payments can save a business money on transaction fees, which can be quite expensive—especially on large invoices.
      • PayPal payments: PayPal is another common way to pay invoices online and simply involves signing into your PayPal account within the payment processing step. To pay an invoice with PayPal, you’ll need to have an active and funded PayPal account or have it connected to your bank account.

      How to Pay an Invoice Offline

      If you received an invoice and are looking to pay it without using an online option, then you’re limited to a few methods. While not the most convenient, safe, or fastest way to pay invoices, offline payments usually include:

      • Paying in person: You can often pay invoices in person—with COVID-19 restrictions, you’ll want to confirm this first. Typically, you can use a credit card, check, or debit card to pay a bill directly at the business.
      • Paying over the phone: Many businesses will also accept payments over the phone, but this is not the most secure way to pay an invoice. The business will collect your credit card information over the phone and pay the bill manually.
      • Paying by mail: You may also be able to write a check and pay your invoice through the mail. Again, this is not the safest or fastest way to pay a bill—and the customer may experience delays, which could cause your payment to arrive after the due date.
      About the author
      Derek Miller

      Derek Miller is the CMO of Smack Apparel, the content guru at, the co-founder of Lofty Llama, and a marketing consultant for small businesses. He specializes in entrepreneurship, small business, and digital marketing, and his work has been featured in sites like Entrepreneur, GoDaddy,, and StartupCamp.

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