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Invoicing and Payment Links

Prerequisites

Before optimizing your invoicing approach, understand:

Payment links convert better than invoices. Invoices with net terms get paid slower than you think. Know when to use which.

Most SMBs default to invoices because that's what QuickBooks does. But a payment link sent immediately after a sale closes 40% faster than a Net 30 invoice. See checkout conversion for optimizing payment completion.

Scope Note

This page covers manual invoices, payment links, and normal SMB B2B flows.

When NOT to use this page:

  • High-volume enterprise invoicing (use ERP/AR systems)
  • Full SaaS subscription billing systems (use platform billing features like Stripe Billing, Chargebee, etc.)

What Matters​

  1. Payment links close faster than invoices. Less friction, immediate action.
  2. Net terms are a loan you're giving. Price them accordingly or skip them.
  3. Partial payments create reconciliation chaos. Decide upfront if you accept them.
  4. B2B buyers prefer ACH for large amounts. Credit card fees on $10k+ transactions hurt.
  5. Expired links cause unnecessary friction. Set appropriate expirations.

When Invoicing Beats Checkout​

Use Invoices When​

ScenarioWhy Invoice Works
B2B with net termsBuyer expects formal document with due date
High-ticket requiring approvalBuyer needs to route internally before paying
Services with detailed line itemsClient needs itemized breakdown
Ongoing relationship with credit termsEstablished account, not one-time purchase
Tax/accounting requirementsBuyer needs formal invoice for records

Use Checkout When​

ScenarioWhy Checkout Wins
One-time purchasesFaster, less friction
Consumer transactionsNo need for formal document
Impulse or quick decisionsSpeed matters
Digital productsImmediate delivery expectation
ScenarioWhy Links Win
Quick quote follow-up"Here's the link to pay" closes fast
Phone ordersAlternative to keyed entry
Service depositsCollect before starting work
Event or appointment bookingSecure spot with payment
Outstanding balance collection"Click here to pay what you owe"

A unique URL that leads to a payment page for a specific amount.

CharacteristicDetails
Best forOne-time transactions, quick collections
FormalityLow. No document, just "pay this amount"
TermsNone. Pay now.
ExpirationUsually 24 hours to 30 days
Example"Pay $500 for design deposit"

Hosted Checkout​

Your checkout page embedded in or linked from your site.

CharacteristicDetails
Best forProduct purchases, cart-based shopping
FormalityLow. Standard e-commerce flow
TermsPay at purchase
ExpirationSession-based (cart timeout)
ExampleStandard e-commerce checkout

Invoice​

Formal document with line items, due date, and payment terms.

CharacteristicDetails
Best forB2B, services, formal accounting needs
FormalityHigh. Document of record
TermsOften Net 15, Net 30, Net 60
ExpirationDue date (not payment page expiration)
Example"Invoice #1234 for consulting services, due in 30 days"

Invoice Workflow for SMBs​

Standard Flow​

Quote → Invoice → Payment → Receipt

Quotes​

  • Use quotes for approval before invoicing
  • Quote should convert to invoice with one click
  • Set quote expiration (7-14 days typical)
  • Don't invoice without quote acceptance for large deals

Invoice Issuance​

Send immediately after:

  • Work completed (services)
  • Goods shipped (products)
  • Contract signed (deposits)
  • Milestone reached (phased projects)

Delayed invoicing delays payment. Invoice the day work is delivered.

Payment Collection​

Net TermWhen to Use
Due on receiptDefault for new customers, small amounts
Net 15Established relationship, fast-paying industries
Net 30Standard B2B, larger enterprises
Net 60+Large enterprise only, price it in

Receipt/Confirmation​

Auto-send receipt when payment received. Include:

  • Invoice number
  • Amount paid
  • Payment method
  • Date received

Net Terms Strategy​

Net terms are a loan. Treat them that way. Factor this into your cash flow planning.

The Real Cost of Net Terms​

Net 30 on a $10,000 invoice:

  • You're lending $10,000 for 30 days
  • At 6% annual cost of capital, that's ~$50
  • If they pay on Day 45 (common), it's more
  • Plus you're taking payment risk

Who Gets Net Terms​

Customer TypeSuggested Terms
New customer, first orderDue on receipt or deposit required
Repeat customer, clean historyNet 15
Established account, high volumeNet 30
Enterprise with formal procurementNet 30-60 (but negotiate)

Enforcing Terms​

  • Send reminder at 7 days before due
  • Send notice on due date
  • Follow-up at 3 days past due
  • Escalate at 15 days past due
  • Collection process at 30+ days past due

Most SMBs are too polite about collections. Don't be. Unpaid invoices can become disputes if customers later claim they never received service.

Partial Payments and Deposits​

When to Accept Partial Payments​

  • Large projects with milestones
  • Customer cash flow constraints (with agreement)
  • Deposit + balance model

When to Avoid Partial Payments​

  • Creates reconciliation complexity
  • Small invoices (not worth the overhead)
  • One-time transactions with new customers

Deposit Model​

StagePayment
Contract signed50% deposit
Milestone 125%
Final delivery25%

Deposits reduce your risk and improve cash flow. Require them for new customers and large projects.

Reconciliation Warning​

If you accept partial payments:

Decide upfront. "We accept full payment only" is a valid policy.

Expiration Settings​

Link TypeSuggested Expiration
Quote follow-up7-14 days
Service deposit24-48 hours
Balance due30 days
Time-sensitive offerHours to days

Shorter expirations create urgency. Longer expirations reduce re-sending friction.

Tracking Opens vs. Completions​

Good payment link tools show:

  • Link sent
  • Link opened (not all tools track this)
  • Payment started
  • Payment completed

Gap between "opened" and "completed" is friction. Gap between "sent" and "opened" is awareness.

Mobile Optimization​

Over 50% of payment links are opened on mobile.

Test your payment links on phone:

  • Does the page load fast?
  • Are fields easy to tap?
  • Does autofill work?
  • Is the amount clearly visible?

Embedding in Emails Without Spam Filters​

Payment links can trigger spam filters.

Reduce spam risk:

  • Send from your domain (not generic @gmail)
  • Include the recipient's name
  • Keep email short (less text = less spam score)
  • Avoid excessive caps or urgency words
  • Use a reputable email provider

Test delivery:

  • Send test to yourself
  • Check spam folder
  • Try different email providers (Gmail, Outlook)

B2B Considerations​

B2B payments differ from consumer payments.

ACH/Bank Transfer Preference​

For invoices over $1,000, offer ACH.

MethodFee on $10,000
Credit card (2.9%)$290
ACH (typically $0.50-$5 flat)$0.50-$5

Big difference. Large B2B buyers expect bank transfer options. See buying payments for fee comparisons.

Credit Card Surcharging for B2B​

If B2B buyers insist on credit cards:

  • Consider surcharging to recover fees
  • Must comply with network and state rules
  • Disclose before transaction

Related: Surcharging Compliance

Purchase Order Matching​

Enterprise buyers may require:

  • PO number on invoice
  • Invoice matching to PO exactly
  • Approval workflows before payment

Ask buyers: "Do you need a PO number on invoices?" before invoicing.

Multi-Approver Workflows​

Large organizations have approval chains:

  • AP clerk receives invoice
  • Manager approves
  • Finance releases payment

Your invoice sits in queue at each step. Follow up at appropriate intervals without annoying.

Tax on Invoices​

Tax Is Complex

Sales tax and VAT on invoices is jurisdictional chaos. This site doesn't provide tax guidance.

What you need to know:

  • Nexus matters: You owe tax where you have tax presence
  • Economic thresholds: Many states trigger nexus at $100K+ sales
  • B2B exemptions: Many B2B transactions are tax-exempt but require certificates
  • Multi-state/international: Consider Avalara, TaxJar, or processor-native tools

Talk to your accountant before making tax decisions.

Where This Breaks​

  1. Customer disputes on invoice terms. "I never agreed to these terms" becomes chargeback. Get terms acknowledged at quote stage, not invoice stage. See friendly fraud for prevention.

  2. Partial payment reconciliation chaos. Customer pays $800 on $1,000 invoice. Now you're chasing $200 and manually reconciling.

  3. Expired links and re-sending friction. Customer opens link two weeks later, it's expired, they give up. Balance expiration against friction.

Test to Run​

2-week invoicing audit:

Week 1: Baseline.

  • Calculate average days-to-payment for recent invoices
  • Identify outstanding AR over 30 days
  • Review current terms by customer segment

Week 2: Optimize.

  • Shorten terms for appropriate customers
  • Send payment links instead of invoices for quick collections
  • Follow up on overdue balances

Success criteria: 10-20% improvement in average days-to-payment.

Scale Callout​

VolumeFocus
Under $100k/mo invoicingUse processor-provided invoicing. Stripe Invoicing, Square Invoices, PayPal. Simple is fine.
$100k-$1M/mo invoicingAR aging reports, systematic follow-up cadence, consider ACH for large invoices, standardize terms.
Over $1M/mo invoicingAR automation, ERP integration, credit management, professional collections for past-due.

Analyst Layer: Metrics to Track​

MetricWhat It Tells YouTarget
Days Sales Outstanding (DSO)Average time to collectunder 30 days for Net 30 terms
AR aging bucketsPayment health by age< 10% over 60 days
Payment link conversion rateLink effectiveness> 70% of links result in payment
Invoice-to-payment timeCollection speedTrack trend over time
Dispute rate on invoicesTerms clarity (chargeback risk)under 1% of invoices disputed

AR Aging Buckets​

Track outstanding invoices by age:

  • Current (not yet due)
  • 1-30 days past due
  • 31-60 days past due
  • 61-90 days past due
  • 90+ days past due

Movement from bucket to bucket indicates collection health.

Next Steps​

Setting up invoicing?

  1. Decide invoice vs payment link vs checkout - Which to use
  2. Follow invoice workflow - Quote to receipt
  3. Set net terms appropriately - By customer type

Improving collections?

  1. Enforce terms - Reminder cadence
  2. Use payment links - Faster than invoices
  3. Track DSO metrics - Days sales outstanding

Handling B2B payments?

  1. Offer ACH for large amounts - Save on card fees
  2. Consider surcharging - Recover card costs
  3. Handle PO matching - Enterprise requirements