Payment Terms are a record of when payment is required and any discounts that are offered.
A payment term encapsulates the number of days before payment is due, how payment is required to be made, and if a discount is offered for quicker payment.
Payment Terms are shared between Vendors, Customers, Purchase Orders, and Sales Orders.
Examples of a Payment Term would be:
- CASH: Payment is due immediately in cash (or equivalent)
- NET30: One of the most popular terms, payment is due in full in 30 days.
- 2P10NET30: Payment is due within 30 days, but a discount of 2% is offered if paied within 10 days.