We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is Deferred Billing?

Malcolm Tatum
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Deferred billing is a strategy sometimes employed by vendors as a means of providing an extra courtesy to a valued customer. Sometimes known as delayed billing, the vendor allows a customer to place an order without the need to pay in advance. The vendor delivers the order and also chooses to delay the request for payment until an agreed upon date in the future.

As part of the process for deferred billing, the vendor often offers this extended delay in invoicing for payment to the customer with no accrual of finance or interest charges in the interim. The expectation is that the customer will pay for the items in a timely manner after the vendor issues an invoice for the order. In return for complying with the terms and conditions that govern the deferred billing arrangement, the credit customer can look forward to receiving the same courtesy with future orders.

The actual structure of a deferred billing process normally does protect the vendor in the event that the customer fails to live up to the terms and conditions that govern the extension of the delayed invoicing. Generally, if payment is not received within the terms outlined on the invoice, the vendor is free to begin applying finance charges to the outstanding balance for as long as it takes to fully pay for the purchase. In addition, the vendor may choose to refrain from extended any further deferred billing privileges to the customer. Should the balance remain unpaid for an extended period of time after the deferred invoice is issued, the vendor may choose to close the customer account to any type of future purchases other than cash.

Deferred billing is not unusual when formal contracts exist between a vendor and a customer. Clients who purchase high volumes of goods and services are often able to negotiate deferred billing terms that may delay the invoicing of outstanding balances for two or more monthly billing cycles. This approach allows the client to not incur interest charges and also stand a reasonable chance of generating revenue from the purchased goods or services that in turn can be used to retire the debt. This is particularly true when the acquired products are used to produce goods and services that are in turn sold by the customer to his or her clients. As payments are received from the customer’s clients, the generated revenue is used to pay the originating vendor.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By wander — On Jun 21, 2011

Deferred billing offers a lot of benefits to customers as it can help you budget for purchases as you can spread out the payments for more expensive items. A great thing about deferred billing from merchants as that it doesn’t carry an interest rate like credit cards do, and this can save you a lot in the long run.

Merchants offer these kinds of deals as it can do wonders for customer loyalty. There is a lot to be said for the feeling of getting something for nothing. Even if you do still have to pay for it, just three to six months down the road.

As a precaution, always make sure the store you are using is reputable if you are shopping online, as they are still going to want a credit card, even if the payments come much later.

By drtroubles — On Jun 21, 2011

There are actually a surprising number of stores that use a deferred billing system to keep their clients happy. You can find deferred billing being offered by everything from beauty shops to gyms. There are entire catalogs of goods available to people with an interest in buying now and paying later.

I think one of the famous examples I have seen is a nationwide chain of furniture stores that offer you the ability to take home anything you like, and they'll get the payment next year. This is of course on approved credit. Nonetheless, deferred billing is clearly alive and well.

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.