Define Payment Terms

Define general values for due date calculation

… the day when the due date calculation should start.

The start day can be 01–31 or 99, where 99 indicates the last day of the month. If a month free of payment should apply, the start day must be entered as 99.

Example

1) The invoicing date is January 20, and the start day is 25. The due date calculation starts from January 25.

2) The invoicing date is January 5, and the start day is 99. The due date calculation starts from January 31.

… how many whole months should be added when calculating the due date from the start day. Valid values are 00–99.

This field regulates the second step in the calculation, which starts from the result of the entry in the 'Start day' field. If the number of months free of payment is set to 2, the calculation of the due date in example 1 above would start from March 25 instead of January 25.

… how many days should be added when calculating the due date. Valid values are 000–999.

This field regulates the third step in the calculation, which starts from the result of the entry in the 'Month free of payment' field. If the number of days is set to 10, the calculation of the due date in example 1 above would start from April 4 instead of March 25.

… a specific day in the month for the due date. Valid values are 01–31 or 99, where 99 indicates the last day of the month.

This field regulates the fourth step in the calculation, which starts from the result of the entry in the 'Number of days' field. If payment day is set to 27, the due date in example 1 above would be on March 27 instead of March 25.

Automatic adjustment of due date

Some customers have fixed days for executing payments each month. You can automatically adjust the due date to match the customer's routines by entering up to four fixed due dates on (CRS610/J). Example: Three fixed due dates are entered for a customer: 10, 20 and 99 (= last day of month). If the due date calculated is December 31, 2002, the actual due date is January 10, 2003.

… whether the payment is split into several payments with separate due dates.

If this check box is selected, 'Payment Term. Open Details' (CRS074/B) for defining payment details is displayed when Enter is pressed on (CRS075/E).

As a result of selecting the 'Split due date' check box, all supplier invoices and customer invoice created during customer order processing are split into several invoices in accounts receivable and the general ledger, each one with a different due date, amount, and invoice number.

On 'Payment Terms. Open Details' (CRS074/E), decide how to retrieve the invoice number for the split invoices in the 'Additional character or number series' field on (CRS074/E). For details, see below.

… whether payment is made in cash on delivery or via invoicing. The parameter selected determines how payment is made when customer orders are processed.

Alternatives

0 = Payment via invoicing

1 = Cash payment.

If the invoicing option is selected, the usual customer account is debited for the payment (accounting rule OI20–100) in accounts receivable. However, if the cash payment alternative is selected, there is no open customer debt to record in accounts receivable. Instead, transactions are created under accounting rule OI20–101 (Cash payment) in the general ledger.

For the cash payment alternative to work automatically, the payment terms are specified for order category Cash order on 'CO Type. Control Fields' (OIS014/F). The program is called from 'CO Type. Open', OIS010/B). This overrides the customer's normal payment terms upon customer order entry.

... whether cash sales management should be activated after invoicing.

This can only be done if the 'Cash payment' check box is not selected.

... if the invoiced amount should be included in the outstanding amount without risk. The outstanding amount without risk is deducted from the outstanding amount when the credit limits are controlled.

Alternatives are:

1 = No

2= Yes

3 = Yes, update credit monitoring

If alternative 3 is selected, the invoices without risk can be monitored in the credit monitoring system (RMS420 - Credit Monitoring. Process). A prerequisite is that this is enabled in (RMS905 - Settings - Credit Monitoring).

The risk per payer can be followed up in 'Customer Credit Limit. Open' (CRS315).

An outstanding invoice amount without risk is a customer invoice or debt that is considered to be without risk in the accounts receivable according to the normal credit policy. The outstanding amount without risk is deducted from the outstanding amount when the credit limits are compared against the fixed credit limits.

Invoices with risk-free payment terms do not consume the available fixed credit limit that has been set for general trading terms. The benefit of this flexible approach to credit checking means that fixed limits do not need to be adjusted except as determined by the regular credit limit or customer risk reviews. For overdue invoices, all invoices are with risk even if they have been treated as risk-free before the due date has passed.

If the invoice date is within a certain month/day interval or day interval, the last day in that interval is used as 'Start day' when calculating a due date.

This field is optional.

The start day interval rules are defined in 'Start day interval. Open' (CMS071) and 'Interval days. Open' (CMS072).

Alternatives

0 = The invoice BOD is processed via LSP to the tax authorities.

1 = The invoice BOD is not transmitted to the tax authorities (Government invoice status 99).

Selecting alternative 0 creates a record in 'Invoice Header. Open' (CMS500) which will be processed to LSP and transmitted to the tax authorities. The record is given Government invoice status 10 in (CMS500) which indicates that the invoice will be transmitted to the tax authorities.

Selecting alternative 1 creates a record in (CMS500) but the record will not be transmitted to the tax authorities. The record is given Government invoice status 99 in (CMS500) which indicates that the invoice is not transmitted to the tax authorities. This could be applicable to invoices that have previously been reported externally. For example, cash transactions, or invoices with 100% discount with no value or VAT.

If the payment term for an invoice with Government invoice status 99 is changed to alternative 0 (included for tax-reporting) and re-created in (CMS500), the Government invoice status will reset to status 10.

Define payment values for partial payments

… the payment method to use for payments in accounts payable. This value, together with the following, makes it possible to process each payment in different ways, for example as a check, draft, or bank transfer.

If a payment method is not entered, the value = = = is automatically inserted. This indicates that the same payment method as that on the original invoice is used.

… the payment method to use for payments in accounts receivable.

If a payment method is not entered, the value = = = is automatically inserted (see above).

… a language-specific set of terms for cash discount calculation. By defining the cash discount per partial payment, it is possible to grant a cash discount only for the first payment, for example.

The value = = = can be entered manually, if the same cash discount terms as those on the original invoice should be used.

… the percentage share of the total amount to pay for this payment (required information).

Note that the total percentage for all recorded partial payments must be 100.

… which invoice number to use for the original invoice when a customer order is created for a customer whose payment terms require that payments be split into several invoices with separate due dates.

Alternatives

0 = The invoice number is retrieved from number series 4 in 'Internal Invoice Series. Open' (MFS165).

1 = An additional character (A-Z) is added.

Start day

Month free of payment

Number of days

Payment day

Start day interval