Payment Terms

This Payment Terms module allows the user to create different payment terms which will be attached to customer account.  At month-end, the system will determined and calculate if the customer should be receiving a discount which can be applied during the cash receipt process.

Screen Shot:

From the Terms Maintenance, the user will define all Customer terms code for their payment. Once a term code is created, it will display int the Customer Maintenance under the Main tab.

Creating a Term Code

The user must click on the Add button to add a new one.

The Days and the net days will be used when the payment is based on the invoice date.  For example: 2% - 15 days - Net 30 days

The Day, the Month, the Net Day and the Net Month will be used when entering terms for the following months. For example: 2% - 15 of the following month - Net 30 of the following month.

Term: During the creation of the Terms code, the user must identified each term code with a specific reference in that field. This field is Alpha-numerical and can go up to 5 characters. Each term code need to have its own reference number. If the user tries to use the same reference twice, an error message will prompt explaining that the record already exist.

The example above displays term as A1, A2 etc. THis field could be customized by the user as wanted as long as it respect the criteria explained above.

%Discount: The user must enter the percentage of the discount if applicable (i.e 2% - 15 days - Net 30 Days). The field will be filed by the user only if the term code includes a discount if pay before a specified number of days. If there is no discount includes in the term code (i.e Net End of the Following Month), this field can be left blank.

Days: This field should be fill in if a discount is given when an invoice is paid before a certain number of days. The number of days is based on the invoice date.

          i.e: 3% - 20 days - Net of 30 Days.

          In this example, the user should enter 2 in the field Days which means a certain discount will be given only if the invoice is paid before 20 days after the invoice date.

Day: This field should be fill in if a discount is given when an invoice is paid before a specific day of the following month.

          i.e: 2% -  15 of the following Month - Net 30 of the following month.

          In this example, the user should enter 15 in the field Day which means a discount will be given only if the invoice is paid before the 15th of the following month. The discount date will be the           same for all invoices dated during that month.

Month: This field should be fill in only if the user previously fill the field Day. Under that field, the user specified the discount date will occurred in which month following the invoice date. 

          i.e: If value 1 is entered in that field, the system will consider the discount date to be anything before the day specified in the field Day of the following month.

Net Days: The user must enter the number of days the remaining balance of the invoice will be payable by the customer if no discount is taken. The number of days specified in the Net Days field are based on the invoice date.

This field can be filled in two situation:

          a. Discount given on an invoice - field %Discount and Days were previously filled:

          i.e: 3% - 20 days - Net 30 Days.

          In this example, the user should enter 30 in the field Net Days.          

          b. No discount given on an invoice - no field previously filled - the term only specified after how many days following the invoice date the balance is payable by the customer:

          i.e: Net 15 days;

          In this example, the user should enter 15 in the field Net Days.

Net Day:  The user must enter the specific day of the month following the invoice date the remaining balance of the invoice will be payable by the customer if no discount is taken. The payment date will be the same for all invoices dated during that month.

This field can be filled in two situation:

          a. Discount given on an invoice - field %Discount, Day and Month were previously filled:

          i.e: 2% -  15 of the following Month - Net 30 of the following month.

          In this example, the user should enter 15 in the field Net Days.          

          b. No discount given on an invoice - no field previously filled - the term only specified the specific day following the invoice date the balance is payable by the customer:

          i.e: Net 30 of the following month;

          In this example, the user should enter 30 in the field Net Days.

Net Month: Under that field, the user specified the payment date will occurred in which month following the invoice date.

          i.e: If value 1 is entered in that field, the system will consider the payment date to be anything before the day specified in the field Net Day of the following month of the invoice date.

This field can be filled in two situation:

          a. Discount given on an invoice - field %Discount, Day and Month were previously filled:

          i.e: 2% -  15 of the following Month - Net 30 of the following month.

          In this example, the user should enter 1 in the field Net Month.          

          b. No discount given on an invoice - no field previously filled - the term only specified the specific day following the invoice date the balance is payable by the customer:

          i.e: Net 30 of the following month;

Once the use enters this information properly, the system will automatically generate a description for this term.

The user must decide which term will be the default by clicking the box at the end of the line which is called Default.  This means that when a new account is created, this term will be the default one but can be overridden by selecting the proper term for the account from a drop down list.

Please note that the Phoenix software keep records of all the changes for the terms in the History section.