Configuring & Using Payment Terms
Document Version v.2
Document Last Updated 7/22/2020
Software Version Documented v.9.6.160

Overview

Payment terms control when payment is due and what discount is applied if received within a certain time frame. This process document will go over how to set up your payment terms within the Savance Enterprise platform. There are multiple payment terms that are accepted within the platform, however, there are two types of payment term settings that drive your terms:

*Two payment term abbreviations used with reference to due dates are prox and EOM. Both refer to due dates being in the following month rather than the current one. Prox is short for "proximo mense," Latin for "in the following month." EOM stands for "end of month." A payment term of Net 30 prox indicates that payment is due on the 30th day of the next month.

Term Examples

Payment term abbreviations and punctuation are informal and may vary, but some typical examples are shown below.

Payment Term Meaning
Net 30 days Payment is due within 30 days. There is no discount for payment received before then.
3% 15/Net 90 Payment is due within 90 days. There is a 3% discount if it is received within 15.
Net 30 prox Payment is due by the 30th of next month.
2% 10 prox/30 prox Payment is due by the 30th of next month. There is a 2% discount if it is received by the 10th of next month.

Configuring Payment Terms

Additional Examples of Date Driven Terms:

Below are a few examples of commonly used Date-Driven Terms:

Example 1:

Example 2:

Example 3:

Term Codes Generated

You will notice that the Term Code field is optional. If you would like you may specify a name for this term by entering a value, however, if you don’t add a term code one will be automatically generated for you. For example:

As you can see if the screenshot below the Term Code that has been generated as 0% 0 EOM NET 60

So the system is determining this code will receive no discount, not due by the end of the month, but needs to be paid in full by 60days.

Using Terms in Account and Vendor Settings

Some companies choose to set specific term codes for their Vendors and specific term codes for their customers even though they may mean the same thing.

For example, you may have a NET30 for your Vendor and a NET30 for your customer. You can add both to your Term Codes and have one code as V30 for Vendor and the other code as C30 for Customer.

Account Settings:

If you wish to assign one of your Term Codes to a customer account, you will need to go to Accounts > Accounts Manager. Once you’ve found your customer go to the ‘Financial Terms’ tab. Choose from the dropdown menu the Terms you wish to make as this clients default*. When completed select ‘Save’.

*Note: You are still able to override these terms at the order level as long as they are not flagged as a Cash Account.

If you have a ‘Cash Only’ customer you can set this as the default preference and it can NOT be overridden at the time of the order. Go to Accounts > Accounts Manager. Once you’ve found your customer go to the ‘Financial Terms’ tab. Check the ‘Cash Account’ box and hit save.

By choosing that setting, when this customer places and new order/quote the ‘CASH’ checkbox will be select and can not un-checked at the order level. When the order is completed you will be prompted to take ‘Cash’ from the customer.

Vendors

If you wish to assign one of your Term Codes to a Vendor account, you will need to go to Purchasing > Manage Vendors. Once you’ve found your Vendor go to the ‘Account Info’ tab. Choose from the dropdown menu the Terms you wish to make as this Vendors default*. When completed select ‘Save’.

*Note: You are still able to override these terms in the Accounting Manager when you are entering Bills.

Using Terms in Receive Money, Invoices & Bills

This next section will go over common terms scenarios, as well as partial payments and term discounts.

Receive Money (Terms Discounts Have Been Applied)

To get to the receive money screen go to Accounting > Accounts Receivable > Receive Money

Enter the customer account that you are receiving money from. Once the account loads all open invoices will be displayed.

As you will notice from the screenshot above in the ‘Terms Disc.’ column this customer's invoice qualifies for a terms discount based on their terms set at their account level. You now have the following options:

Receive Money (Terms Discounts Have Expired)

To get to the receive money screen go to Accounting > Accounts Receivable > Receive Money

Enter the customer account that you are receiving money from. Once the account loads all open invoices will be displayed.

As you will notice from the screenshot above in the ‘Terms Disc.’ column this customers terms discount have expired. You now have several options:

Using Terms in Accounts Receivable

During the invoicing process you have the ability to update the terms for a specific invoice vs using what is set at the Account level.

Go to Accounting > Accounting Manager > Invoicing

By default all open invoices will appear in the Invoicing tab. During the review process you will have the ability to adjust the terms on that specific Invoice. Select the Invoice number to open the Shipper.

By default the Totals tab is open and the Terms is located under the Invoice Status section.

From the Terms drop down-down menu select a new terms to be applied.

You will notice, based on the new terms you’ve selected the Due date will automatically adjust. i.e. my Current Due date is 7/22/2020, and I updated my terms to 2% 10 days /NET 60, my new date is now is 8/1/2020

In addition to the Terms Due date being updated if a discount is a part of the new Terms, a Term Discount will appear under the Invoice Summary.

Once you’ve updated the Invoice, select to process the Invoice.

NOTE: If you need to change the invoice, after being invoiced, reopen the shipper and select to open the invoice, make your changes and re invoice the order.

Partial Payments with Terms Discounts

In the scenario that your customer qualifies for a terms discount, however, sends you a partial payment. The next section will cover what happens to the discount after partial payment has been made.

In the receive money screen enter the customer’s name to view their open invoices.

In the scenario the customer has sent a payment of $2000, they also have several invoices that qualify for a Terms Disc. Select the Invoices that can be paid with this amount, you will notice once of the invoices will be partially paid.

I will get a message asking what I would like to do with the underpayment, in this case we will ‘Leave this as an underpayment’

You’ll notice that this invoice qualified for a 7.89 terms discount, however when I made a partial payment and posted the balance of the invoice is added to the invoices the terms discount will still appear. NOTE: You are NOT giving the customer a double discount. The Terms Discount is based on the full amount of the invoice (Orig. Balance), and does not adjust based on the new balance owed.

Using Terms in Accounts Payable

Just like configuring Terms for accounts, the same goes for vendors. However you do have the option to override the terms when entering and or paying bills.

Entering Bills

Go to Accounting > Accounting Manager > Enter Bills

Regardless if you have a PO, or entering a bill without a PO you will have the same option to update the terms.

Using the Terms drop-down, select the new terms amount. NOTE: Depending on the new terms selected you will notice that the Discount and Due Date will automatically update.

In addition if there is a discount built into the terms selected a Terms Discount amount will appear within the subtotals section.

Once update select ‘Create Bill’

NOTE: If you need to adjust the terms after a bill has been created go to Accounting > Accounting Manager > Review Bills/Credit/Debit Memo. Look up the specific bill using the available filters.

Select the bill you wish to update and select “Edit”

Change the Terms using the drop-down, make sure your dates are correct and ‘Save’ your changes.

Paying Bills

When you are ready to pay bills go to Accounting > Accounts Payable > Pay Bills

From the screenshot above you will notice that there are several Bills that are passed the Terms Discount date. This can be shown in the Age Date column and the date is highlighted in red. In the Terms Discount Amt column you will see the discount amount based on the terms that were used when creating the bill.

In the scenario that you need to change the terms, or discount amount within the Terms Discount column right-click on the bill and select ‘Edit’

The ‘Edit Bill’ screen will appear

Select Edit and make your changes, i.e. choose new terms, or you can change the dollar amount in the Discount Amount field. You will notice the terms discount and balance due will automatically update.

Partial Bill Payments with Terms Discounts

This next section will cover if you are partially paying a bill to a vendor with a terms discount that is applied.

Go to Accounting > Accounts Payable > Pay Bills

In the Pay Bills screen, you will notice the discount amount based on the terms selected when entering the bill in column Term Discount Amount.

When you are ready to pay bills select the bills you plan on paying. In the event that you are partially paying a specific bill, you will go to the ‘Amount To Pay’ field and enter the dollar amount you are paying.

Once you’ve finished selecting your bills and the amounts to be paid select ‘Pay Bills’. NOTE: You are NOT paying the vendor a double discount. The Terms Discount is based on the full amount of the invoice/Bill (Amount Due), and does not adjust based on the new balance owed.

To view additional information about Terms please refer to the Handling Special Terms document.