Establish customer payment terms

Note

We will not be accepting edits to this topic, because it is generated from a business process in Lifecycle Services.

This procedure defines a cash discount and due date setup. This task guide uses the USMF demo company.

  1. Go to Accounts receivable > Payments setup > Payment days.
    • The setup for the Terms of payment is shared for Accounts receivable and Accounts payable. If you define it in module, it will be available in the other module also. For this task guide, I set up all the terms of payment under Accounts receivable.
  2. Click New.
    • Create a payment day if your terms of payment require a specific day of the week (Monday, Tuesday, etc) or a specific date of the month (5th, 10th, etc).
  3. In the Payment day field, enter an ID for the Payment day in the payment day field.
  4. In the Description field, enter a description of the payment day.
  5. In the Week/Month field, select either Week or Month.
    • If you want to enter a day of the week, such as Monday, select Week. If you want to enter a date in the month, such as the 10th, select Month. Select Month for this example.
  6. In the Day of month field, enter a date.
    • The date should be entered as a number, such as '10', and not as '10th'.
  7. Click Save.
  8. Close the page.
  9. Go to Accounts receivable > Payments setup > Terms of payment.
  10. Click New.
    • Terms of payment is used to define how the due dates will be calculated. The cash discount date setup is defined in a separate page.
  11. In the Terms of payment field, enter an ID in the Terms of payment field.
  12. In the Description field, enter a description.
  13. Select a Payment method such as COD, Net, Current month, etc.
    • The Payment method is used to define the start of how the due will be calculated. For example, Net is used if the due date is always a set number of months or days after the invoice date. COD can be used to when payment is required upon invoice, so a due date wouldn't be calculated. Select Current month for this task guide.
  14. Select a Payment day if a specific day of the week or date are included in the calculation.
    • Depending on your terms of payment, you may enter a quantity in Months or Days. Or you can use the Payment schedule or Payment day to 'add' to the end of the Payment method. If the due date will always be the 10th of the next month, select a Payment day of the 10th.
  15. Click Save.
  16. Close the page.
  17. Go to Accounts receivable > Payments setup > Cash discounts.
  18. Click New.
    • This page is used to define how the cash discount date will be calculated.
  19. In the Cash discount field, enter an ID in the Cash discount field.
  20. In the Description field, enter a description.
  21. If a tiered cash discount is available, select the Next discount code that is relevant after this new cash discount.
  22. Enter the number of days used to calculate the cash dicount date.
    • If Net principle is selected, the number of days will be added to the invoice date to calculate the cash discount date.
  23. Enter the percentage of the cash discount.
  24. Enter the main account to which the cash discount will post for customer invoices.
  25. In the Discount offset accounts field, select an option.
    • If you select 'Accounts on the invoice lines', the cash discount will post to the same asset/expense main account on the lines of the vendor invoice. If you select 'Use main account for vendor invoices', the cash discount will post to the main account you define in the 'Main account for vendor invoices'. For this example, select 'Use main account for vendor invoices.'
  26. Enter the main account to which the cash discount will post for vendor invoices.
  27. Click Save.