Payment Terms

Payments terms are used in the sales and purchasing systems to determine when transactions are due for payment and whether discount should be applied.

  • Description - for example 30 Days from Date of Invoice

  • Basis - the basis of calculation of the due date either by reference to the Invoice date or Month end date

  • Days - the number of days from the base day

  • Months - the month end used in the base day

  • Discount - a percentage which is used in Sales Ledger to calculate the settlement discount applicable to the transaction

Each Customer or Supplier is allocated a payment term from this table. Examples

Description Basis Days Months Discount
45 Days from Invoice Date Invoice 45 0 0
End of Month following Invoice Date Month 0 1 0
End of Invoice Month plus 75 days with 2.5% Discount Month 75 0 2.50
End of Month 2 following Invoice Date Month 0 2 0