Terms are used to specify when payment is due on customer invoices and vendor bills. Define the specific requirements of a term of payment by creating a term record. You can create different payment terms for different customers or vendors.
To create a standard term record:
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Go to Setup > Accounting > Setup Tasks > Accounting Lists > New (Administrator).
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On the Add to Accounting List page, select Term.
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On the Term page, select Standard.
Note
Standard is selected by default, as opposed to Date Driven.
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Enter a name for the term in the Terms field.
For example, you can name a term Net 30.
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In the Days Till Net Due field, enter the number of days until the net amount of the invoice or bill becomes due.
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In the % Discount field, enter the percentage discount if the invoice or bill is paid early.
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In the Days Till Discount Expires field, enter the number of days the early payment discount is available.
For example, if the early payment discount is available for 15 days after the bill is issued, enter 15in this field.
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Click Save.
To create a date driven term record
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Go to Setup > Accounting > Setup Tasks > Accounting Lists > New (Administrator).
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On the Term page, select Date Driven. Date driven terms are used when payment is due on a particular calendar date; for example, the 15th of the month.
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Enter a name for the term in the Terms field.
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In the Day of Month Net Due field, enter the day of the month when the net amount of the invoice is due.
If you enter a date that does not exist in the month the transaction is due, the last day of the month becomes the due date.
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In the Due Next Month If Within Days field, enter the number of days before the due date during which issued invoices will be carried forward to the next month.
Use this field to ensure that customers are always given a minimum number of days to pay after they are invoiced.
For example, if invoices are due on the 30th of each month and you enter 5 in this field, then invoices issued between the 25th and 30th are due for payment by the 30th of the following month.
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In the % Discount field, enter the percentage discount if the invoice is paid early.
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If you offer a discount for early payment, enter the last day of the month the early payment discount is available in the Day Discount Expires field.
For example, if the early payment discount is available through the 20th of each month, enter 20 in this field.
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Check the Preferred box if you want to use this term for customers by default.
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Click Save.
Now this term can be used on customer records, vendor bills and other transactions.
You can create several term records to apply the appropriate terms to individual customers, vendor bills and other transactions. Standard terms include the following:
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1% 10 Net 30
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2% 10 Net 30
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Due on receipt
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Net 15
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Net 30
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Net 60
You can apply the terms to invoices by choosing a term on individual invoices or by setting default terms on customer and vendor records. For more information, read Using Terms of Payment.