Multiple payment terms
Multiple payment terms are used to create multiple due dates for a single invoice. A hierarchy of discount dates and percentages is optional. This example shows multiple payment terms with discounts.
Discount Logic: Discounts are only offered if a payment is made before the first obligation date. Payments must be made on or before a discount date for a discount to be granted. The discount amount is calculated by multiplying the discount percentage by the total open obligation amount. If the payment amount is less than the amount due, the remainder is due on the obligation date. If the payment amount is enough to cover more than one obligation, the remaining obligations are not due until the originally defined due dates.
Example
An invoice amount of $500,000.00 is paid in quarterly payments with the first due date 60 days after the invoice date of January 1. Subsequent payments are due in 90 day increments. These are the discount options:
- Three percent discount if paid within 20 days after the invoice date (Jan. 21)
- Two percent discount if paid within 30 days after the invoice date (between Jan. 22 and Jan. 31)
- One percent discount if paid within 40 days after the invoice date (between Feb. 1 and Feb. 10)