Terms of payment and payment days
The terms of payment are shared for accounts receivable and accounts payable. That means that terms of payment that were created in accounts receivable can also be used in accounts payable and vice-versa. Use the Terms of payment page to define all the terms of payment used by a company and the customers. Use a term of payment for calculating a due date based on the date of the invoice.
Specify terms of payment for each of the following:
- Customer on the Customers page
- Sales order on the Sales order page
Scenario
Adventure Works Cycles has a standard customer payment term of Net 30 days. If an invoice with a Net 30 payment term ships goods on September 15, and the invoice is dated November 15, then payment is due December 15. With a Net 30 Days settlement, Adventure Works Cycles must receive payments within 30 days of the invoice date, according to the settlement. After that date, if the payment is not completed, an interest charge of a specified percent per month might be added to the invoice, and the customer must pay additional fees. Other services charges might also apply.
If a term of payment is linked to a payment schedule, the rules set up in the term of payment are used to calculate the due date of the first installment.
The rules that are set up in the payment schedule are used to calculate the due date of the following installments.
If the COD (cash on delivery) payment method is selected, and Cash payment is enabled, it indicates that payments should be made in cash and not by check. Therefore, In the Ledger posting area from the Cash field, you need to select a main account for settlement of invoices that will be used for cash payment.
Payment days
You can use payment days to define the payment day used for calculating the due date. Payment day can be specified for either a day in the week or in the month. This helps payment proposal to suggest those customer invoices that should be brought into the customer payment journal for posting. The date should be entered as a numeral, such as 10, rather than an ordinal number like 10th.
Accounts receivable > Payments setup > Payment days
