You must add at least one terms code before you can enter Accounts Payable transactions.
For each terms code you:
- Define the payment terms by which your vendors calculate invoice due dates.
- Specify the method used to calculate discount periods and discount amounts on invoices from vendors who offer discounts for early payment.
Installment Payments
A set of terms can be as simple as a due date and discount date and rate, or they can include payment schedules to allow for installment (timed) payments.
When you enter invoices for a multiple payment schedule, Accounts Payable automatically calculates the schedule, but you can change schedule amounts or due dates for each invoice. For example, you can specify that the first payment is not due for a year from the invoice date.
Setting Up Installment Terms
You use the Multiple Payment Schedule option to set up a terms code that allows installment payments. You can define installment periods that vary in length, and use different methods to calculate due dates and discounts. You can also set up as many installment periods for a terms code as you need.
Calculating Discounts Before or After Tax
If you pay tax on purchases, you can specify whether to include tax in the document total that Accounts Payable uses to calculate discount amounts
Using Standard Due Dates
Standard due dates are similar to "day of the month due," except they do not restrict you to a single due date. For example, you can use standard due dates to assign invoices to the 15th or 30th of each month.
If your vendor uses standard due dates, you can create a terms code table to calculate a due date for each of up to four ranges of days on which invoices were issued.
For example, your table could specify that invoices entered between the 1st and 15th of each month are due on the 30th of the month, and that invoices entered between the 15th and the end of the month are due on the 15th of the next month.
You define standard due dates with a table that lets you specify a due date for each of up to four ranges of days on which invoices were issued. You can also specify due dates that are one or more months later.
When you use due date tables, you can either define discount periods in the same way as for other terms options, or you can enter a table of standard discount periods.
Assigning Terms to Vendor Records
You assign a terms code to each vendor record to set the default terms that appear when you enter transactions for the vendor. You can choose different terms for the vendor during transaction entry without changing the standard terms assigned in the vendor record.
Using Terms with Transactions
When entering transactions, you enter a terms code with each invoice, and Accounts Payable automatically does all the required calculations.
Editing Terms Codes
You can change all the information in a terms code record except the terms code.
Effects of Changes
If you make a terms code inactive:
- You cannot select an inactive terms code as the default code when adding a new vendor group or vendor record.
- You cannot update a vendor group or vendor record that uses an inactive terms code.
- You cannot use the inactive terms code when you add an invoice. (But you can print and post invoices you entered with the terms code before you made the code inactive.)
Other changes you make to terms codes have no effect on existing, unposted documents that use the codes. If you want to use changes such as new discount percentages on existing unposted invoices, you must edit the invoices to enter the new information for the terms code.
Deleting Terms Codes
Deleting payment terms does not remove any information from your ledger (except the terms definition). If you accidentally delete a payment terms code, you can just add it again.
Deleting a payment term after adding an invoice (but before posting it) has no effect on posting. However, you must specify a different code if you edit the invoice (because you cannot save changes to the invoice if the terms code is invalid).
Accounts Payable prevents you from deleting a terms code that is assigned to a vendor record.