Payment terms specify various details about an invoice, such as:
- Due date.
- Discount rate and period (for early payment), and whether to calculate the discount before or after tax.
- Number of payments in a multiple payment schedule.
Note: You must define at least one set of payment terms before you can add customer records.
Defining Payment Terms
You define sets of payment terms on the A/R Terms screen. For more information, see A/R Terms Screen.
Terms Codes
Each set of payment terms is identified with a terms code. You specify default payment terms for customers by assigning a terms code to each customer and customer group.
- You must assign a terms code to every customer and customer group in Accounts Receivable.
- By default, the terms code for a customer group is assigned to customers in the group (for example, when you add a new customer to a customer group, or change a customer's group). However, you can change the terms code for a customer.
Installment Payments
You can use the Multiple Payment Schedule option to allow installment payments. You can set up as many installment periods as you need, and you can define installment periods that vary in length.
Discounts
You can offer a discount for early payment, specifying the rate of the discount and the period during which it is available. Also, if you charge taxes on sales, you can specify whether to calculate the discount on the document total before or after tax.
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.
You can specify a due date for each of up to four ranges of days on which invoices are issued. You can also specify due dates that are one or more months later.
For example, invoices entered between the first and fifteenth of each month may be due on the thirtieth of the month, and invoices entered between the fifteenth and the end of the month may be due on the fifteenth of the next month.
When you use this option, 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.
Changing Terms for Individual Transactions
When entering a transaction, the terms code for the customer is used by default. However, you can change this to any valid terms code. You can also change most of the details of the payment terms, including:
- Due date.
- Discount rate and period.
- Amounts and discount dates for a multiple payment schedule.
Note: You cannot increase the number of installment payments in a payment schedule.