{"id":4468,"date":"2016-04-04T10:47:30","date_gmt":"2016-04-04T15:47:30","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/business-finances\/the-customer-invoice-as-credit.html"},"modified":"2024-06-06T04:23:59","modified_gmt":"2024-06-06T09:23:59","slug":"the-customer-invoice-as-credit","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/business-finances\/the-customer-invoice-as-credit.html","title":{"rendered":"The Customer Invoice as Credit"},"content":{"rendered":"\n
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The Customer Invoice as Credit<\/h1>\n
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If you are a business that provides goods or services, chances are you invoice your customers in order to receive payment<\/a>. An invoice is simply a bill that sets out the amount to be paid, what is being paid for, and the terms of payment. Although most businesses don’t realize it, by giving customers an invoice, what businesses are really doing is extending credit<\/a> to their customers.<\/p>\n

Invoices are Credit<\/h2>\n

Most businesspeople tend to view an invoice as simply a request or demand for payment<\/a>, but by providing the good or service in advance of payment and requesting payment after the fact, what businesses have actually done is extend credit to their customer.<\/p>\n

More specifically, the law considers this to be an unsecured loan<\/a>. Unsecured loans are loans that are not secured by collateral. Suing a customer to recover on an unsecured loan won’t work if the customer simply doesn’t have the money because there’s nothing to recover against.<\/p>\n

When extending credit<\/a> to a new customer, since that is what you are really doing by invoicing them, it pays to check on their credit just like you would for any loan. Business credit checks are more complex than personal credit checks and should consider information such as:<\/p>\n