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Invoice Due Date Verification

Texas

I am a subcontractor and have a contract with a vendor listing net 30 terms, however, their invoices show terms to be "Due upon receipt" which is causing a problem between the GC and my company regarding my payment applications and releases. One of my GC's listed several invoices for the month of February but the invoice dates were listing March. The vendor sends an invoice approximately 10 days after equipment is delivered to the job site requesting payment for a full month. When I called the vendor this morning for date clarification, I was informed the invoice date is inconsequential and that the date I should be using is the delivery date. So far, everything I've read contradicts that explanation because our contract states Net 30 which defines as payment would be due 30 days from the invoice date. What date should be used to determine a due date???

3 replies

Apr 21, 2020
"Net 30" generally means 30 days from invoice date. BUT it can also mean 30 days from when performance is provided, in this case the delivery date. Since the invoice date can be controlled by the company issuing the invoice, the company can easily back date an invoice to effectively make it due on receipt. In this case, I would interpret "net 30" to mean 30 days from delivery date. I hope this helps. You should review the contract and see if the "net 30" term is defined. If not, you should contact the person that signed the contract and get the term clarified. Hopefully, your initial contact was with the person in the accounts receivable department who just does what they are told. Perhaps there is a standard in your industry that can be applied. It would seem 30 days after delivery would be reasonable.
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Apr 21, 2020
"Net 30" generally means 30 days from invoice date. BUT it can also mean 30 days from when performance is provided, in this case the delivery date. Since the invoice date can be controlled by the company issuing the invoice, the company can easily back date an invoice to effectively make it due on receipt. In this case, I would interpret "net 30" to mean 30 days from delivery date. I think you should review the contract and see if the "net 30" term is defined. If not, you should contact the person that signed the contract and get the term clarified. Hopefully, his initial contact was with the person in the accounts receivable department who just does what they are told. Perhaps there is a standard in your industry that can be applied. It would seem 30 days after delivery would be reasonable.
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Apr 21, 2020
In most cases the terms of the contract control over the terms sent on any invoice following entry of the contract for work pursuant to the contract. I would suggest pointing out the exact provision of the contract reflecting the net 30 terms to vendor. If they continue to demand different payment terms, they could potentially find themselves in breach of the contract. However that probably doesn't do you much good as you need the materials they are providing.
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