Set up customer payment terms

You must assign payment terms for every customer. Typically, these terms specify the period allowed to a customer to pay off the amount due. You may set Net Terms or Prox Terms, and demand cash in advance, cash on delivery, a deferred payment period of 30 days or more, or other depending on your company needs.

Although you assign payment terms when you create a customer, you may also modify those terms on specific invoices.

The following procedure describes how to create Terms and report on all Term reference codes and descriptions. To learn how to assign terms to a customers, see Add a customer.

To create customer terms

1. Go to File>Customer>Terms. .

   

2. Click New.
3. In the A/R Term box, type a new code or reference number for the Terms, and then press the Tab key.
4. Type a Description.
5. Choose your payment terms option.

   Net Terms
   Net Terms is the default. The payment interval between the invoice date and the due date is a fixed number of days that you specify in the Net Days box. If payment is not made within that time interval, a finance charge may be applied. You may also specify Discount Days.

   To choose Net Terms, leave the Prox Terms check box cleared, and then specify the

   • Net DaysThe number of days after the original invoice date given to pay the net payment in full. After this date, the invoice becomes overdue and incurs finance charges.
   • Discount Days The number of days after the original invoice date that the payer is eligible for a discount, if they complete payment by that date. For example, entering 10 in this field would give the customer 10 days to submit payment and receive a discount. After 10 days, the customer would pay invoice in full. If no discount, leave this field at 1. If there is a 0 discount, then set the Net days to equal the Discount Days.
   • Discount % The discount percentage that will be applied should payment be made in full by the discount days or date terms. If you don't want to offer a discount, type 0.

   Some examples:

   Term	Description	Configuration
   Net 30	Payment is due in full 30 days after the invoice date.	Net Days: 30 Discount Days: 0 Discount Days : 0
   1% 10 Net 30	A 1% discount will be applied if payment is made within 10 days of the invoice date; if not, payment is due in full 30 days after than invoice date.	Net Days: 30 Discount Days: 10 Discount %: 1
   2% 20 Net 60	A 2% discount will be applied if payment is made within 20 days of the invoice date; if not, payment is due in full 60 days after than invoice date.	Net Days: 60 Discount Days: 20 Discount %: 2

   Prox Terms
   These payment terms let you define the payment due date from the beginning of the following month. The word "Prox" is from the retail industry and means "next of month." Invoices that do not meet the designated "cutoff" date for one month, would be paid in the next month. Typically the cutoff date is set to 25 or 31.

   You can set the cutoff date in File>Company>Master: Accounting, Cutoff Day of Month.

   Inform ERP allows you set to Prox days as the number of days following the invoice date. Typically, this is 30, 60, or 90, so payment is due the month following the invoice date, 2 months following, or 3 months following.

   You can then set the day of the month on which the payment is due, as well as a date by which a discount will be applied. You may also offer a discount by entering date by which a discount will be applied and a discount percent. If no discount is offered, enter 0% .

6. You can then set the day of the month on which the payment is due. You may also offer a discount,

   To choose Prox Terms., select the Prox Terms check box, and then specify

   • Prox Days The number of days that define the prox period: 30, 60, or 90.
   • Day of Month Due The day of the month on which payment is due. If you specify 31 or higher, payment is due on the last day of the month.
   • Disc Day of Month The date by which an invoice must be paid in full to receive a discount.
   • Secondary Day of the Month Due If you have split prox terms, then this is the date by which the second payment is due.
   • Secondary Discount Day of MonthIf you have split prox terms, this is the date by which an invoice must be paid in full to receive a discount.
   • Discount % The discount percentage that will be applied should payment be made in full by the discount days or date terms. If you don't want to offer a discount, type 0.

   Some examples, all assuming a cutoff date of the 31:

   Term	Description	Configuration
   Net 10 Prox	Payment is due in full on the 10th day of the month following the bill month. No discounts are available. Invoice Date: August 5 Payment Due Date: September 10	Prox Days: 30 Day of Month Due: 10 Disc Day of Month: 1 Secondary Day of Month Due: Blank Secondary Discount Day of Month: Blank Discount %: 0
   60 Net 10 Prox	Payment is due in full on the 10th day of the second month following the bill month. No discounts are available. Invoice Date: August 5 Payment Due Date: October 10	Prox Days: 60 Day of Month Due: 10 Disc Day of Month: 1 Secondary Day of Month Due: Blank Secondary Discount Day of Month: Blank Discount %: 0
   5% 10 EOM Prox	A 5% discount will be applied if payment is made on the 10th day of the month following the bill month; if not, then payment is due in full on the last day of the month following the bill month. Invoice date : August 5 Discount awarded if payment made by Sept 10 Payment in full due Sept 30	Prox Days: 30 Day of Month Due: 31 Disc Day of Month: 10 Secondary Day of Month Due: Blank Secondary Discount Day of Month: Blank Discount %: 5
   Net 15 Prox Net 30 Prox	There are two payments due per month: The first payment is due in full on the 15th day of the month following the bill month; the second payment is due on the 30 day. No discounts are available. Invoice Date: August 5 Payment Due Date: September 15 Secondary Due Date: September 30 .	Prox Days: 30 Day of Month Due: 15 Disc Day of Month: 1 Secondary Day of Month Due: 30 Secondary Discount Day of Month: Blank Discount %: 0

7. If you want to automatically release backordered products to customers as soon as they are received, select the Auto B/O ReleaseAutomatically releases backordered products to the customer as soon as they are received. .
8. To include terms on customer statements, select the Print StatementFor customers assigned these terms, includes term details on their customer printed statements. You will typically enable this feature, except for terms such as C.O.D customers. check box.
9. To automatically print, email, or fax an invoice as soon as it is posted, select the Print InvoiceAutomatically prints, faxes, or emails an invoice to the customer during the invoicing process, depending on their Customer Master configuration. Clear this box if Sales Orders with this terms code should not have an invoice sent during the invoicing process. check box.
10. To automatically mark invoices under these terms as paid, select the Auto Apply Cash Automatically marks any invoice with these terms as paid. This option may be helpful for cash customers. check box. This is useful for your cash only customers.
11. To automatically calculate and apply discounts based on products, select the Apply Product Discount Calculates discount amounts by products and applies those discounts as part of the terms. Configure the discount percent File>Product>Master: General, A/R Invoice Discount. check box. If no discounts, leave this check box cleared.

    The discount percent is set on File>Product>Master: General, A/R Invoice Discount % . Combine this option with the File>Company>Master: Accounting, Default Product Invoice Discount to Terms discount to determine how the discount is calculated

    • Option 1 - Hybrid Method (recommended)

      Both the A/R Invoice Discount % field (set in the Product Master) and the Discount % (set here in the A/R Terms) are used. Products with blank discount percents will be calculated with the discount set on the A/R Terms. Products with zero discount percents are not applicable for discounts. To use this method, set File>Company>Master: Accounting, Default Product Invoice Discount to Terms discount = Y.

    • Option 2 - Product Discount Only Method

      Only the A/R Invoice Discount % field (set in the Product Master) is used. Products with blank or zero percent discount amounts are not applicable for discounts. The Discount % (set here in the A/R Terms) will be ignored. To use this method, set File>Company>Master: Accounting, Default Product Invoice Discount to Terms discount = N.

12. Click Save.

Tip
If you want to make the invoice date the same as the cutoff date. then in the Company Master, set the Use Cutoff day for EOM A/R Invoices to Yes. For example, if you have a Cutoff Day of 25, then this setting will make the invoice date the 25^th for any invoices posted on the 26^th-31^st of the month.

To view all existing payment terms

1. Go to File>Customer>Terms.
2. Click Report.

   

3. On the Field Selection pop-up that appears, you can choose which fields appear. Drag the fields into the Print Order area, and then click OK.
4. On the Print Document pop-up, click View.

   

To update payment terms

1. Go to File>Customer>Terms.

   

2. In the A/R Term box, click the magnifying glass, and then click the terms you want to update.

   

3. Click Edit.
4. Modify the terms as described in To create customer terms, above.
5. Click Save.

To delete payment terms

Warning! Do not delete payment terms that have already been assigned to a customer. If you do, then you must update the customer with new terms, or you must assign terms each time you enter a sales order for this customer. All historical information about these terms will be saved.

1. Go to File>Customer>Terms.
2. In the A/R Term box, click the magnifying glass, and then click the terms you want to delete.
3. Click Edit.

   

4. Once the payment terms are in edit mode, click the Delete button.
5. On the confirmation message that appears, click OK.