A business can miscalculate its cash flow by assuming it will definitely have the money 30 days after invoicing, when the contract may contain additional requirements that delay the clock starting.
Frequently Asked Questions
What should a business check before signing a contract?
Invoicing, acceptance, payment terms, penalties, delivery obligations and termination provisions.
Why is payment timing important?
Because the supplier may have to pay its own expenses before receiving the customer's money.
Can a contract have different payment milestones?
Yes — some contracts pay according to stages, deliverables or milestones rather than a single lump sum.