Net Term Days allow you to offer customers a defined grace period to review invoices and arrange payments before the amount becomes due. By setting a payment term of x days, you give your customers that many calendar days from the invoice date to settle the balance.

This is a standard practice in B2B billing. For example, setting Net 30 means the customer has 30 days from the invoice date to make the payment.

What Are Net Term Days?

Net Term Days (also called payment terms or credit terms) define the number of days a buyer has to pay an invoice after it has been issued. The term “Net” refers to the total amount due, and the number that follows indicates the deadline.

How the Due Date is Calculated

The formula is straightforward:

Invoice Due Date = Invoice Date + Net Term Days

For example:

Why Use Net Term Days?

Net Term Days are essential for businesses that operate on credit-based billing. Here are common reasons to use them:

• Build trust with customers: Giving customers time to pay demonstrates confidence in the business relationship.
• Align with customer cash flow: Many businesses need time to process invoices internally before releasing payment.
• Industry standards: B2B transactions commonly use Net 15, Net 30, or Net 60 terms as part of contractual agreements.
• Reduce payment friction: Customers are more likely to commit to a subscription or service when they know they have a reasonable window to pay.
• Contractual compliance: Enterprise contracts often stipulate specific payment terms that must be honored in the billing system.

Setting Up Net Term Days

Net Term Days are configured at the customer account level. When you create or update a customer account, you can specify the number of net term days in the account preferences.

Steps to Configure

1. Navigate to Customers and select the customer account.
2. Open the account’s Preferences or Billing Settings section.
3. Set the Net Term Days field to the desired number of days (e.g., 0, 10, 15, 20, 30).
4. Save the changes.

Once configured, every new invoice generated for that customer will automatically have its due date calculated using the net term days value.

Note: A value of 0 means “Due Upon Receipt” — the payment is due on the same day the invoice is issued.

How Net Term Days Impact Payment Flows

Net Term Days affect both e-mandate (auto-collect) and manual payment flows. Understanding the distinction is critical for setting up your billing operations correctly.

Impact on E-Mandate (Auto-Collect)

Net Term Days don’t apply to Auto Collect. An Auto Collect subscription’s invoices are due on the day they are issued, whatever the account’s or the tenant’s net term days.

The customer pays by approving the e-mandate:

• Subscription starting today: approving the mandate takes the first payment straight away (the authorization charge), which pays the first invoice. The customer can approve with UPI Autopay or a card only, because eNACH (bank account) mandates can’t be charged at approval.
• Future-dated subscription: approving the mandate takes only a ₹1 authorization that the gateway refunds. The customer can also approve with eNACH. The gateway’s first debit, on the start date, pays the first invoice.

After that the gateway debits each renewal on the mandate’s schedule, and each debit pays that renewal’s invoice.

How it works step by step:

1. The subscription is created with Auto Collect on. The first invoice is issued, due today.
2. The customer receives the mandate approval link (the payment request email’s payment link) and approves the mandate.
3. For a subscription starting today, the gateway charges the first payment at approval. For a future-dated one, it debits the first payment on the start date. Either way, BillHive records the transaction and marks the invoice, payment request and order paid.
4. The subscription activates once the first payment is recorded: at once for an immediate start, or on its start date for a future start. An eNACH debit can take 1–3 days to clear, so a subscription paid by eNACH may activate a little after its start date.

The customer has 24 hours to approve the mandate. If they don’t, BillHive cancels the order, voids its invoice and cancels the mandate at the gateway, so the link stops working and nothing is debited. The order screen’s 10-minute countdown is only how long the screen waits; you can close it, and the order updates in the Orders tab when the customer approves. 5. Before each renewal the renewal invoice is issued. On the renewal date the gateway debits the mandate, and the debit pays that invoice.

Key Point: With Auto Collect the customer acts once, by approving the mandate. To give a customer time to pay an invoice, use the manual payment flow (Auto Collect off) with net term days.

E-Mandate Lifecycle:

The mandate goes through the following states during its lifecycle:

Initialized → Pending → Active → Paused / Completed / Cancelled / Expired

Only mandates in the Active state are used for auto-collection. If a mandate is in any other state when the due date arrives, the system falls back to the manual payment flow.

Impact on Manual Payment

When a customer does not have an active e-mandate, or when the subscription is configured with autoCollect = false, the payment follows a manual flow. Net term days play an even more important role here:

How it works step by step:

1. A subscription renewal or billing cycle triggers invoice generation.
2. The invoice is created with a due date = invoice date + net term days.
3. The customer receives a payment notification email with the invoice details and a payment link.
4. The customer reviews the invoice during the net term period.
5. The customer initiates payment manually through the payment link (via credit card, bank transfer, UPI, etc.).
6. The payment gateway processes the transaction and sends a webhook callback. If the customer pays offline instead, your team records the payment on the customer’s Transactions tab.
7. The invoice status is updated to Paid, and any subscription waiting on that invoice is activated.

Key Point: With manual payments, net term days define the grace period during which the customer is expected to pay. After the due date passes, the invoice becomes overdue and may trigger collection actions.

New Subscriptions with Manual Payment

Net term days also decide when a new subscription becomes active if it is invoiced manually (Auto Collect off):

• Net term days > 0. The customer gets service straight away, as agreed in the contract. On the due date BillHive checks the invoice: if it is paid, collection ends; if not, the invoice is marked Overdue and dunning starts.
• Net term days = 0. The order waits until the invoice is paid, whether the payment comes through the payment link or is recorded by your team as an offline payment (bank transfer, cheque, cash). Orders created by your team in the BillHive app do not expire: they wait until paid or cancelled. Only checkouts started from your website keep the 30-minute payment window.
• Payment recorded early. If the payment is recorded before the order reaches the payment step, the subscription still activates: BillHive checks the invoice before it starts waiting, and checks it again every hour while it waits, so an invoice settled by any means (payment, credit memo) is picked up.

See Unapplied Payments for how an offline payment is applied across open invoices.

Net Term Days and the Invoice Lifecycle

Net term days directly influence the timing of invoice state transitions:

Invoice Created → Invoice Posted → [Net Term Period] → Due Date Reached
                                                              │
                                         ┌────────────────────┴────────────────────┐
                                         │                                         │
                                   Payment Received                         Payment Not Received
                                         │                                         │
                                    Invoice Paid                           Invoice Overdue
                                                                                   │
                                                                      Collection Actions Triggered
                                                                      (Dunning, Reminders, Write-off)

Timeline Example: Net 30

Comparison: E-Mandate vs. Manual Payment with Net Terms

Best Practices

• Match terms to your contracts: Always set net term days to match the payment terms agreed upon in the customer’s contract or license agreement.
• Use shorter terms for new customers: Consider using Net 0 or Net 10 for new customers until a payment history is established, then extend to Net 30 as trust builds.
• Combine with e-mandate for reliability: Encourage customers to set up an e-mandate. Even with Net 30 terms, the auto-debit ensures payment on the due date without relying on the customer to remember.
• Monitor overdue invoices: Set up dunning workflows and reminders for invoices that pass their due date without payment.
• Be consistent: Apply uniform payment terms across similar customer segments to simplify billing operations and cash flow forecasting.

Frequently Asked Questions

Q: Can I set different net term days for different customers? Yes. Net term days are configured at the individual customer account level. Each customer can have a unique payment term based on their contract.

Q: What happens if I change the net term days for an existing customer? The change applies to future invoices only. Existing invoices retain the due date that was calculated when they were generated.

Q: Does Net Term Days affect the invoice amount? No. Net term days only affect the due date of the invoice, not the amount billed.

Q: Can I offer early payment discounts with net terms? Early payment discount terms (e.g., “2/10 Net 30” — 2% discount if paid within 10 days, otherwise full amount due in 30 days) can be configured separately. Contact your BillHive administrator for setup.

Q: What is the default net term days value? The default is 0 (Due Upon Receipt), meaning the payment is due immediately when the invoice is generated.