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.
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Description - for example 30 Days from Date of Invoice
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Basis - the basis of calculation of the due date either by reference to the Invoice date or Month end date
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Days - the number of days from the base day
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Months - the month end used in the base day
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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 |