Terms

From the Terms Maintenance, the user will define all Vendor terms codes for their Suppliers. Once a terms code is created, it will be accessible in the Vendor Maintenance on the Main tab.

The terms codes will be applied every time an invoice is added to the Invoice file in Purchase Invoices Entry.   It will also be used in the Cash Requirement,  Automatic Cheques Printing and Manual Cheques programs.

When an invoice is paid, the system will automatically calculate if the terms are being met based on the Invoice Date and terms code set up in the vendor maintenance.  Also, If the payment meets the criteria of the terms code, the system will automatically apply the discount and reduce the amount payable.  

Creating a Terms Code

To create a new Terms Code, click on the Add button to add a new Code to the Maintenance.

Note: Not all fields (columns) in the Terms Code Maintenance will be used.

•The columns labelled 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% - 15th of the following month - Net 30th of the following month.

Term: Each Term requires its own unique code or identifier. The Term Code field is Alpha-numeric and may be up to 5 characters in length.  If the user tries to set up a terms code that is already in use, the system will display an error message "This RECORD already exists".

In the example above, the first Terms Code is identified with A1 and each new terms code is incremented by 1: A1, A2, A3.  These codes may be customized by the user as required as long as it respects the criteria explained above.

%Discount: Enter the discount percentage if applicable (i.e 2% - 15 days - Net 30 Days). The field will be populated by the user only if the terms code includes a discount.  If there is no discount required, this field may be left blank.

Days:  This field represents the Number of Days.

          This field should be completed IF a discount is given when an invoice is paid within a specified number of days from the Date of the Invoice.

          i.e: 3% - 20 days

          In this example, the user should enter 20 in the Days column which means the specified discount will be given only if the invoice is paid within 20 days of the Invoice Date.

          If there is no discount this is the number of days when payment is due from the date of the invoice

Day:  This field represents the Day of the Month.

          This field should be completed, IF a discount is given when an invoice is paid before a specific day of a month.

          i.e: 2% -  15th MF

          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.  Under these terms,  the discount date will be the same for all invoices dated during a specific month.

Month: This field represent the number of Months

          This field should be completed ONLY if the user filled in the field under the Day column.  In the Month column, the number of months after the date of the invoice needs to be defined for the discount to be applied.  Most commonly, 1 will be keyed in to represent the month following the Invoice Date.  

          i.e: 2% 15th MF / Net 30th MF.  If value 1 is entered in the Month column, the system will consider the allowable discount date to be anything before the day specified in the field Day of the following month.

Net Days: This field represents the Number of Days

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

This field would be completed for 2 situations:

          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:

                    i.e: Net 15 days;

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

Net Day:  This field represents the Day of the Month

          The user must enter the specific day of the month following the invoice date.

          The remaining balance of the invoice will be payable 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:

          i.e: Net 30 of the following month;

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

Net Month: This field is the Number of Months

          Under this field, the user specifies how many months after the invoice date the payment date will occur 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 speicifes the specific day following the invoice date the balance is payable:

                    i.e: Net 30 of the following month;

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

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

The user needs to decide which term will be the default by clicking the box on the right of the screen, labelled 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 keeps records of all the changes made to these terms in the History section.

Print

The option to print the information on the screen is available by clicking on the button in the bottom right corner.  The report has the standard options and may be printed or emailed.