Terms Code FAQs

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Expand/Collapse item Is it possible to establish common payment terms for customers?

Yes. You can use Terms Code Maintenance to establish common payment terms for your customers. After terms codes are established, you can assign these standard terms to customers. For more information, see Terms Code Maintenance.

The following are terms code examples.

 

Expand or collapse item Example 1

This example is based on the following field entries made in Terms Code Maintenance.

 

Field

Entry

Terms Code

02

Description

2% 10 Days, Net 30 Days

Days Before Due

30

Days Discount Allowed

10

Discount Method

Discount on Gross Amount

 Discount Rate

2.000%

 

In this example, the discount due date is calculated to be within 10 days after the invoice date, and the invoice due date is determined to be 30 days after the invoice date. The discount applies to the gross invoice amount.

 

Expand or collapse item Example 2

This example is based on the following field entries made in Terms Code Maintenance.

 

Field

Entry

Terms Code

04

Description

2% 10th, Net 30

Days Before Due

30

Days Discount Allowed

10

Day of a Month

check box selected

Minimum Days Allowed

5

Discount Method

Discount on Line Items Only

Discount Rate

2.000%

 

If the invoice is dated after the fifth of the month, the discount due date would be the tenth of the following month. If the invoice is dated before the fifth of the month, the discount due date would be the tenth of that month. The invoice due date is calculated as 30 days after the invoice date. The discount applies to the invoice line items only.

 

Expand or collapse item Example 3

This example is based on the following field entries made in Terms Code Maintenance.

 

Field

Entry

Terms Code

05

Description

4% 10th, Net End of Month

Days Before Due

31

Day of a Month

check box selected

Minimum Days Allowed

0

Days Discount Allowed

10

Discount Method

Discount on Line Items and Freight

Discount Rate

4.000%

 

In this case, 10 days are added to the invoice date to determine the discount due date, and the invoice due date is calculated as the end of the month beyond the discount due date. This discount applies to invoice line items and freight. An invoice dated January 27 would have a discount due date of February 6, and the invoice due date would be February 28 or 29 (not January 31).

 

 

Expand/Collapse item Is it possible to establish common payment terms for vendors?

Yes. You can use A/P Terms Code Maintenance to establish common payment terms for your vendors. After terms codes are established, you can assign these standard terms to vendors. For more information, see A/P Terms Code Maintenance.

The following are terms code examples.

 

Expand or collapse item Example 1

This example is based on the following field entries made in A/P Terms Code Maintenance.

 

Field

Entry

Terms Code

02

Description

2% 10 Days, Net 30 Days

Days Before Due

30

Days Discount Allowed

10

Discount Rate

2.000%

 

In this example, the discount due date is calculated to be within 10 days after the invoice date, and the invoice due date is determined to be 30 days after the invoice date. An invoice dated January 27 has a discount date of February 6 and an invoice due date of February 26.

 

Expand or collapse item Example 2

This example is based on the following field entries made in A/P Terms Code Maintenance.

 

Field

Entry

Terms Code

06

Description

2% 10 Days, Net 30 Days

Days Before Due

30

Day of a Month

Check box selected

Days Discount Allowed

10

Minimum Days Allowed

5

Discount Rate

2.000%

 

If the invoice is dated after the fifth of the month, the discount due date is the tenth of the following month. If the invoice is dated before the fifth of the month, the discount date is the tenth of that month. The invoice due date is calculated as 30 days after the invoice date. An invoice dated January 27 has a discount date of February 10 and an invoice due date of February 26.

 

Expand or collapse item Example 3

This example is based on the following field entries made in A/P Terms Code Maintenance.

 

Field

Entry

Terms Code

03

Description

4% 10, Net End of Month

Days Before Due

31

Days Discount Allowed

10

Day of a Month

Check box selected

Discount Rate

4.000%

 

In this case, 10 days is added to the invoice date to determine the discount due date, and the invoice due date is calculated as the end of the month beyond the discount due date. An invoice dated January 27 has a discount due date of February 6, and an invoice due date of February 28 or 29, not January 31.

 

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