Prox terms
Prox terms are used to define a specific day of the month as the net due date and optional discount due date. Use prox terms to establish a net due date for all invoices that are generated during a defined period. For example, paying all invoices due on or before the 31st of the month.
Prox is short for the Latin term "proximo mense" and means in the next month. Invoices that do not meet the designated cutoff date for one month are paid in the next month. This is similar to the rationale that credit card companies use to produce billings. Your monthly bill includes charges up to a specified cutoff date. All charges after that date are included in the next month's bill.
Example
This example shows prox term near the cutoff day. Assume this information about the sample invoice:
| Variable | Value |
|---|---|
| Invoice Date | February 20 |
| Invoice Cutoff Date | 20 |
| Invoice Amount | 100.00 |
| Prox Day | 15 |
| Discount Percent | 5.0% |
| Net Due Date | March 31 |
These are the results:
| Discount Date | Discount Percent | Discount Amount | Due Date | Amount Due |
|---|---|---|---|---|
| March 15 | 5.0% | 5.00 | March 31 | 100.00 |
If the invoice was a day later, February 21, then these dates are the differences:
- The discount date is April 15.
- The due date is April 30.