How to Create a Payment Term ( Simple and Advance & Reporting)

Creating Payment Terms

1. Go to Accounting > Configurations > Payment Terms. 

     2. Click on New

     3. Fill out the necessary fields:

• Payment Terms - This will be the name of your payment terms.
• The description on the Invoice - You can use the same Payment Term name if you like
• Display terms on Invoice - If you need to display the terms in invoice, this box should be ticked
• Terms - This will be the rule of your payment term. Please check the different types of payment terms for a detailed explanation. 
• Company - As we are in the multi company nature we should select the relevant company here.
  
  
  
  

Types of Payment Terms

1.  Pay on invoice- this means that the whole invoice must be paid at the date of the invoice.
   • Terms will look like this:
     • Due Type - There will be three options: Balance, Percent, and Fixed Amount. For this case, we will use Balance as the type since the whole Balance needs to be paid as of the invoice date.
     • Months & Days - Since this is an immediate payment type of payment term, the whole balance is payable at the invoice date. Thus the amount (Balance) is due 0 days/months after the invoice date. 
     • End of Month -  Again as this is an immediate payment this will not be activated
     • Days after end of month - will also be 0 as this is an immediate payment
     • Discount % & days -  will also not be applicable as this is an immediate payment
       
       
       
       
2. Days after Invoice Date - this is used when the whole amount is paid after a certain number of days. If it will be after a few months or days.
   • Terms will look like this:
     • Due Type - should select Balance as the whole amount will be paid after a certain number of days/ months
     • Months & Days - Certain month & days the amount should be paid after.
     • End of Month -  If the amount should be paid at the end of the month you can activate this.
     • Days after end of month -  If the amount should be paid after certain days from the end of month. (End of month column should be activated to do this)
     •  Discount %  & days - If you need to provide a discount to the amount paid before certain days mentioned as the basic terms you can fix the percentage of discount and days in "Discount days" column.
       
       
3.  End of the Following Month / Certain date of the following month - this will be used if a due date is specified and it is a specific date of the following month. We can also use this if we are going to create payment terms due at the end of the following month.

• Due Type - should select Balance as the whole amount will be paid after a certain number of days/ months
• Months & Days - should be specified according to the invoice date.
• End of Month -  will not be applicable here as we are talking about following month
• Days after end of month -   will not be applicable here as we are talking about following month
• Discount %  & days - If you need to provide a discount to the amount paid before certain days mentioned as the basic terms you can fix the percentage of discount and days in "Discount days" column.

4. Days after the end of the invoice month -this will be used if a certain day after the end of the invoice month is given as the due date of the invoice.

• Due Type - should select Balance as the whole amount will be paid after a certain number of days/ months
• Months & Days - should be specified according to the invoice date.
• End of Month -This should be activated as we have to specify the days after end of month
• Days after end of month -   Specific date after end of month​
• ​Discount %  & days - If you need to provide a discount to the amount paid before certain days mentioned as the basic terms you can fix the percentage of discount and days in "Discount days" column.

5. Installment/Deposits - This will be a combination of the above said payment terms type. We will use the "30% Now, Balance 30 days" 

• You will be asked to create 2 or more terms. To add more terms, just click on add a line. And open each line to define the terms.  
  
  
  
• For the first line:
  • Due Type -can be a Fixed amount or a Percentage. 
    • Fixed Amount - if you clicked on fixed amount, you should add the total fixed amount that must be paid and rest of the details will be nil and end of month will not be activated as this is the immediate amount received.
      
      
      
      
      
    • Percentage - we will be using this for the example "30% Now, Balance 30 days"
      
      
      
• For the second line, Balance 30 days.
  • Due Type: Since the balance must be paid in 30 days, the type must be Balance.
  • Months & Days - Month should 0 or Days should be 30
  • End of Month -Not applicable as balance to be paid in exact 30 days
  • Days after end of month -   not applicable as we have already specified the days as 30 days 
  • ​Discount %  & days - If you need to provide a discount to the amount paid before certain days mentioned as the basic terms you can fix the percentage of discount and days in "Discount days" column. 
    
    
  • • Click Manual Save button on top to save changes.