Payment terms and payment methods
Define instalment schedules and early-payment discounts, and the methods used to take or make payments.
Required permission: reference.manage
Before you begin
Payment terms and methods are reference data. Customers, suppliers, sales orders and bills choose from them. You need reference.manage.
On first setup, click Add the standard terms on Administration > Masters > Payment terms and Add the standard methods on Administration > Masters > Payment methods. Running either twice adds nothing new.
Create a payment term
- Go to Administration > Masters > Payment terms and click New term.
- On Agreement, type a Code (up to 24 characters, unique, for example
NET21) and a Term name (Net 21 days). An existing code gives '<code> is already a payment term.' - Choose Counted from: Invoice date, Order date, Delivery date, Receipt date or Service date.
- Optionally set Grace days (0 to 120) and the In use from and In use until dates. The end date cannot be before the start.
- Set Offer to customers and Offer to suppliers. At least one must be Yes ('A term nobody may use is a term nobody can choose.').
- Leave May be changed on a document on if staff may adjust it per document.
- Optionally set Early discount percent and Earned within days. A percent with no days gives 'A discount needs a number of days to be earned within.'
- Open the Instalments tab. Each line has a Share (percent of the total, a fixed amount, or whatever is left), a Value, and a Falls due rule: Immediately, days after, months after, end of that month, end of month then days, a day of next month, a day of the month, or next chosen weekday. Add 1 to 24 lines. Percents must total 100 unless the last line is the balance. Otherwise: 'The instalments add up to 90 percent, not 100...'
- Optionally add up to six Early settlement tiers (a discount % and the days). A later tier must be worth less than an earlier one.
- Open Preview, enter On an amount of and Dated, and check the dates. Click Save.
Worked example
A 50/50 term: 50 % at 30 days and the balance at 60 days. Preview it on AED 100,000 dated 1 October 2026. You see AED 50,000 due on 31 October and AED 50,000 due on 30 November. Add a 2 % discount within 10 days, and the preview shows the saving as AED 2,000 if paid in full by 11 October.
Due-date rules to know
- Day 31 in a 30-day month becomes the last day of that month.
- Next chosen weekday is never today.
- Set Status to Archived to stop offering a term. Old documents keep it.
Create a payment method
- Go to Administration > Masters > Payment methods and click New method.
- Type a Code (2 to 30 letters, digits,
_or-; upper-cased; locked after creation), a Name and an optional Arabic name. - Choose the Kind: Cash, Bank transfer, Cheque, Card, Online, Direct debit or Other.
- Choose Used for: Receipts and payments, Receipts only, or Payments only. A receipts-only method is not offered when you register a supplier payment.
- Choose Lands in, the account the money goes to. Leave it blank to use the company cash account. It must be a bank or cash posting account, not a control account, otherwise '<code> <name> is not a bank or cash account.'
- Set Reference to Optional or Required. A cheque is always Required.
- Save. Archived methods cannot be chosen on new settlements.
Good to know
- The payment term preview is a tool for checking. It posts nothing.
- A payment term with instalments totalling more than 100 % followed by a balance line is accepted today, which would leave a negative balance. Check the preview before you save.