Payment Terms
For example, payment terms can be used to calculate the payment due date for each invoice.
You can create a number of different sets of payment terms, each of which is identified by a payment terms code.
You can assign a Scheduled Payments code to the payment terms group, enabling you to automatically split certain transactions, whilst they are entered, into installments with a schedule of due dates.
You then assign a set of payment terms to a customer or supplier using Customers (CUS) or Supplier (SUS). The payment terms are used to calculate the default settlement details automatically on the customer's or supplier's transactions.
Payment terms are defined in two parts using Payment Terms (PYT): a payment terms header and a set of payment term details.
- The payment terms header identifies the payment terms and contains general payment details.
- Each payment term detail
determines how selected payment details are used and calculated. For example, a
payment term detail might determine how the payment due date is calculated.
Another might determine the first discount date and identify the percentage
discount available. Another might assign one of the document dates available to
a debt-chasing letter and then calculate when this letter should be produced
(if it is required).
Note: If you change the details of a payment term, you can use Payment Terms Update (PYU) to change the payment terms that have been applied to existing transactions.
What Transaction Details Can be Determined by the Payment Terms
Payment terms can be used to define any of the following payment related transaction dates and associated percentage charge:
- payment due date
- discount date 1 and discount rate (percent)
- discount date 2 and discount rate
- interest date and interest rate
- late payment date and late payment charge.
The payment terms can also determine the use of up to four, optional document dates that are available on every transaction. These document dates can be used to identify any documents produced that apply to the transaction, for example, debt chasing letters, or statements.