It’s always a good question. First off however, let me clarify that paying your bills after the due date is not a good choice because if it happens once, it’s not a big deal, but in case it’s becoming a habit, it does not send a good message to your suppliers and they may either start demanding prepayments for goods and services or that you pay at the spot. Either way, you do want to be on their good grace so that you get to pay later.
So, the question is whether to pay on time or a tad earlier?
Generally speaking the due date is the latest you should pay. However, you should always consider following things:
- If the date of payment falls to weekend;
- If it’s a foreign supplier meaning the bank accounts are also abroad;
- If you have enough funds at the payment date due to many invoices having the due date on the same day.
Payments that are scheduled to happen on weekend are always best being paid up front a tad earlier than waiting for the day after the weekend. Make it a good habit of yours.
The thing with accounts abroad is a simple matter of transfer times – you pay the invoice from your bank account say on Monday, but the transfer takes time and your supplier receives the funds on Thursday for an example. Now, if the due date of the invoice was on Monday, you’re balance got overdue with your supplier. In case you knew this and made your payment a week before, it will reach your supplier exactly on time.
It’s never a bad thing to pay earlier, but you wouldn’t want to be late all the time now would you?