Payment Terms
Different Invoices and Purchase Invoices can be assigned different terms for payment: last date for payment, Cash or Credit Note etc.
To open this setting, click [Settings] in the Master Control panel or select 'Settings' from the File menu, and then double-click 'Payment Terms' in the 'Settings' list. The 'Payment Terms: Browse' window is opened, 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 FirstOffice. The Code may consist of one or two characters, and both numbers and letters can be used.
- Text
- Enter the name for the Payment Term, to be shown in the 'Payment Terms: Browse' window and the 'Paste Special' list.
- Net Days
- The credit period in days. 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.
- Cash Account
- Paste Special
Accounts setting
- 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 in the Account Usage S/L or P/L settings respectively will be used. Cash Notes are described below in the section describing the "Cash" Type.
- Type
- The Payment Terms can belong to one of three types. The type determines how the due date is calculated.
- Normal
- A normal payment. The value in the Net Days field will be added to the Invoice Date to calculate the Due Date.
- Credit
- This type is used for Credit Notes, to make sure that the Sales and Purchase 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 you approve a Cash Note, a Nominal Ledger Transaction will be created which debits the Cash Account (or, if that is blank, the Cash Account in 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 in the Account Usage P/L setting) is credited. There is no need to enter a Payment.
When you have entered the Payment Term record, save it using the [Save] button and close the window by clicking the close box. Then, close the browse window using the close box again.
