Configure terms of payment and payment days
Use the Terms of payment page to define all the terms of payment used by a company and their vendors. Use a term of payment for calculation of a due date based on the date of the invoice.
Specify terms of payment for each of the following:
- Vendor on the Vendors page.
- Customer on the Customers page.
- Purchase order on the Purchase order page.
- Sales order on the Sales order page.
Scenario
The company Adventure Works Cycles has a standard vendor payment term of Net 30 days. If an invoice with a Net 30 payment term ships goods on September 15, and the invoice is dated November 15, then payment is due December 15. With a Net 30 Days settlement, Adventure Works Cycles must pay the net due within 30 days of the invoice date, according to the settlement. After that date, if the payment is not completed, an interest charge of a specified percent per month can be added to the invoice. Other service charges may also apply.
If terms of payment are linked to a payment schedule, the rules set up in the terms of payment are used to calculate the due date of the first installment. The rules set up in the payment schedule are used to calculate the due date of the following installments.
If the cash on delivery (COD) payment method is selected, and the Cash payment is enabled, it indicates that payments should be made in cash and not by check. Therefore, in the Ledger posting area in the Cash field, you need to select a main account for settlement of invoices that will be used for cash payment.
Accounts payable > Payment setup > Terms of payment
Payment days
Use payment days to define the payment day used for calculating a due date. The due date is always rounded up to the nearest specified date. Payment day can be specified for either a day in the week, or in the month.
Accounts payable > Payment setup > Payment days
