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Working with Payment Terms
Payment Terms allow you to specify the payment due date relative to the date that the associated Transactional Document was issued.
For example, the Payment Terms for a particular Customer may be 2%, 10 Net 30. This means that if a Sales Invoice was issued to the Customer on 4th February 2016 the payment would be due in 30 days time i.e. on the 6th March 2016. Also, if payment is received within 10 days a 2% discount will be given.
The Payment Term Document allows you to specify both the relative due date, and also the associated early payment discount.
A Customer’s (or Supplier’s) default Payment Terms can be specified on the associated Profile Tab (as shown below).
When creating a Customer Sales Document, it inherits the Payment Terms for that Customer and automatically sets the Due Date, as can be seen below:
On the purchasing side when a Bill from a Supplier is created, i.e. the Bill’s Due Date is automatically derived from the date the Bill as issued and the Payment Terms defined.
How to create new Payment Terms
- From the Explorer click Accounting→Payment Terms.
- The current List of Payment Terms is displayed.
- Click ‘Create New‘ to display a new Payment Term Document (as shown below).
The Term Type field determines how to calculate the Due Date for the Transactional Document (e.g. Sales Invoice) based on the Issue Date. In this example it is set to ‘Due In Number of Days’ which allows you to specify an absolute number of days in the ‘Net due in’ field. Other possible values are:
- Due next month (allows you to specify which day in month)
- Due at end of month (i.e. last day of month of issue)
- Due on Issue Date (set to Document’s issue date)
- Set Date manually (Set manually)
You can create as many Payment Terms as you wish.