What is a Terms Calculation?

The terms calculation determines the discount rate on the payment and date due for an invoice. The terms calculation lets you choose the date from which the invoice due date and discount date are calculated. You can choose one of the following:

• invoice date

• receipt of invoice date

• earliest receipt date

• latest receipt date

• ship-to arrive date

You can set up your Accounts Payable application to use the best terms calculation. In the best terms calculation, the Accounts Payable application compares the payment terms codes defined for an invoice, a purchase order, and a vendor. The application automatically selects the terms code that yields the best discount rate and due date. You can override this selection by changing the due date field or the discount fields.