How to troubleshoot net_payment_term and grace period on mid-cycle changes

Changing net_payment_term or grace period mid-period shifts your invoice due dates and finalization timing. This can look like a billing error when it is actually expected behavior. An invoice's due date is always its issuing date plus net_payment_term, so the two settings below are what move it.

How the settings work

net_payment_term is the number of days between an invoice's issuing date and its payment due date. Grace period is how long after the billing period ends before a draft invoice is finalized: a grace period of 0 finalizes at period end, and a grace period of 7 days finalizes 7 days later. Because the issuing date moves with finalization, extending the grace period also pushes the due date out by the same number of days.

Lago does not suspend or continue service when a payment fails. It marks the invoice payment_overdue and fires the invoice.payment_overdue webhook, and what happens to the customer's service from there depends entirely on how your integration handles that webhook.

What a mid-cycle change affects

A change to net_payment_term or grace period is not limited to future invoices. It also updates the due date on your existing draft invoices. Only invoices that are already finalized keep their original values and are left untouched.

This is often the surprise: if you changed the term expecting only new invoices to use it, your open drafts will already reflect the new value, and that is working as intended.

This article reflects guidance drawn from customer case resolutions. It is not officially supported documentation and may not apply to all situations.