Payment Terms
Different Invoices can be assigned different terms for payment: last date for payment, Cash or Credit Note etc. Payment Terms are also used to establish systems of settlement discounts.
The entries in this setting are used also in the Purchase Ledger when you are entering Purchase Invoices from your Suppliers.
On first selecting the setting, the 'Payment Terms: Browse' window is displayed, showing all Payment Terms previously entered. Double-click a Payment Term in the list to edit it, or add a new term by clicking the [New] button in the Button Bar.
- Code
- Enter the unique Code by which the Payment Terms record is to be identified from elsewhere in Hansa. The Code may consist of one or two characters, and both numbers and letters can be used.
- Net Days
- The credit period in days. If the Type (below) is set to "Normal", when this Payment Term is used in Invoices and Purchase Invoices, the value entered here will be added to the Invoice Date to calculate the Due Date. If the Type is "Next Month" the Due Date will be the n:th day of the next month, where n is the number entered here.
- Cash Discount %
- If the Type is "Normal", enter the rate of discount for the cash discount, if any.
- Cash Discount Days
- In this field you enter the maximum number of days allowed for a cash discount term. If the setting is 10 days, the customer gets the assigned discount if you receive payment within 10 days.
- Text
- Here you enter the name for the Payment Term as it will be shown in the 'Payment Terms: Browse' window and the 'Paste Special' list.
- Cash Account
- Paste Special
Account register, Nominal Ledger/System module
- If the Type is set to Cash, enter the Account to be debited (when a cash sale is approved) or credited (when a cash purchase is approved). If this is blank, the Cash Account on card 1 of the Account Usage S/L or P/L setting will be debited. Cash Notes are described below in the section describing the "Cash" Type.
- Price List
- Paste Special
Price List register, Pricing module
- Any Price List entered here will be brought into all Orders or Invoices using this Payment Term if their Price List field is otherwise blank. This is useful for users who have different prices for Customers who pay by different methods (for example, special prices for credit card payments).
- Instalment
- Paste Special
Instalments setting, Sales Ledger
- This field is used to connect the Payment Term record to an Instalment plan, defined in the Instalments setting. Please click here for a full description.
- Type
- The Payment Term can belong to one of four types, and the choice of type determines how the due date is calculated.
- Normal
- A normal payment. The value in the Net Days field shows how many days the Due Date is from the Invoice Date.
- Credit
- This type is used for Credit Notes, to make sure that the accounts receivable and payable ledgers are updated correctly. You should have at least one Payment Term record of this type if you wish to raise Credit Notes.
- Cash
- This type is used for cash payment. The number of days is not relevant. Invoices with this Payment Term are known as Cash Notes.
- In the Sales Ledger, when a Cash Note is approved, a Nominal Ledger Transaction is created which debits the Cash Account (or, if that is blank, the Cash Account on card 1 of the Account Usage S/L setting) and credits the appropriate Sales Account for each Item on the Invoice. Therefore, no posting to a Debtor Account is made as the Cash Note is immediately treated as paid. There is no need to enter a Receipt.
- Cash Notes behave in a similar fashion in the Purchase Ledger. In this case, the Cash Account (or, if that is blank, the Cash Account on card 1 of the Account Usage P/L setting) is credited. There is no need to enter a Payment.
- Next Month
- If you choose this type it means that the value in the field Net Days stands for that specific day of the month.
- Since it is a fixed date (if the field contains 15 it means the 15th of the month) instead of a certain number of days, this results in a credit period of between 15 and 45 days, depending on when the Invoice is created.
The table in the lower part of the window can be used to enter various translations of the Payment Terms text, which will be printed on documentation from Orders and Invoices. Specify a Language in the first column using 'Paste Special' if necessary, and the appropriate translation in the second column. There is no need to enter a row for your home Language.
If a Language has been entered for the Order or Invoice, that will determine which translation will be printed. If no Language is specified, the text entered in the Text field will be printed.
Introduction to Settings in the Sales Ledger
