4.6. Payment Terms

Payment terms are used to determine the due date for a payment. A payment term selected at business partner level will e used by default when entering a customer order or invoice.

The Payment Term window, located in the Partner Relations -> Business Partner Rules -> Business Partner Setup menu, is used to define payment terms. The following fields are available:

• Name, Description - are used to identify the record within the system;

• Document Note - text that can be printed on all the invoices that use the payment term;

• Next Business Day - if the due date is a non-working day the next available day will be used.

• After Delivery - if checked, the shipment date will be used to determine the due date. If cleared, the invoice date will be used;

There is more than one way you can set up a payment term: Fixed Date, Fixed Due Date, End of Month, Net Days and Schedule.

Fixed Date

You can choose a fixed payment term by selecting the Fixed Date checkbox. You will have to introduce the Due Date which is the payment deadline.

Fixed Due Date

By selecting the Fixed due date checkbox the due date will be set in a fixed day of the month. The month and year will be calculated by adding a specific number of months to the to the document date:

• Fix month day - here you enter the month day in which the payment is due

• Fix month offset - here you enter the number of months after which the payment is due

• Fix month cutoff - here you enter the last day of the the month used to calculate the next due date. If the document date day is after the fix month cutoff the next month will be used o calculate the payment deadline

End of Month

By selecting the End Of Month checkbox, the due date will be set to be on the last day of the month, with the possibility of adding Days After End Of Month.

Net Days

You can fill in the Net Days until the payment deadline. Optionally, if a discount is granted in case of advance payment you can complete the Discount Days, Discount %. Discount Days 2, Discount 2 % and Grace Days.

• Discount Days, Discount % - if the payment is made within the period determined by Discount Days a discount is given. The discount percentage is entered in Discount %

• Discount Days 2, Discount 2 % - a second discount may be added with it's respective period and percentage.

• Grace Days - this amount is added to net days to determine the final payment deadline.

Schedule

SocrateCloud also provides the option to configure a payment plan, which allows the payment to be divided into smaller amounts that are due to be paid according to a schedule. A schedule type payment term will overwrite any other payment term defined within the window.

The Schedule tab is used to define a "schedule" type payment term. For each payment fraction enter a corresponding percentage and the due days allowed. Create new records until the 100% percentage has been hit. The following fields are available:

• Percentage - percentage of the total payment used to calculate the payment fraction due;

• Net Days - used to determine the payment deadline for the respective payment fraction

• Discount Days, Discount % - if the payment for the payment fraction is done within the period described by Discount days, a discount will be applied. The discount percentage used is entered in Discount %.

When the calendar has been set up, go back to the Payment Term tab to validate the Schedule. Select the Validate button to validate the Payment Term. The validation process makes sure that the schedules introduced will cover 100% of the payment (no other percentages are allowed). The payment term cannot be used until the schedule has been validated.