Define vendor payment terms

This topic explains how to set up payment terms for vendor invoices. This task uses the USMF demo company.

  1. Go to Navigation pane > Modules > Accounts payable > Payment setup > Terms of payment.
  2. Select New. The Terms of payment page is used to define how the due date will be calculated. It is not used to define how the cash discount date will be calculated.
  3. In the Terms of payment field, type a value.
  4. In the Description field, type a value.
  5. In the Days field, enter a number. The number entered here will be used to add to the due date, or to the end of the period identified in the Payment method. For example, if you select Net, the number will be added to the due date. If you select Current month, it will add the number to the last day of the current month to calculate the due date.
  6. Select Save.
  7. Close the page.
  8. Go to Accounts payable > Payment setup > Cash discounts.
  9. Select New.
  10. In the Cash discount field, enter an ID.
  11. In the Description field, type a value.
  12. If the vendor offers a tiered discount, select the next cash discount after the current one is expired.
  13. Close the page.
  14. In the Days field, enter a number. The quantity entered in the Days field will be used to calculate the Cash discount date, based on what option was selected in the Net/Current field. If Net was selected, the quantity will be added to the invoice date to determine the cash discount date. If Current month was selected, the quantity will be added to the end of the currency month to determine the cash discount date.
  15. Enter the percentage of the cash discount in the Discount field.
  16. Enter the main account to which the cash discount will be posted for customer invoices, then enter the main account to which the cash discount will be posted for vendor invoices. If Discount offset accounts is set to Use main account for vendor discount, then the Main account will be used. If the option is set to Accounts on the invoice lines, the cash discount will be posted to the asset/expense accounts on the invoice's lines.
  17. Select Save.