About Payment Terms
ACCESS
Contact your financial institution to set up payment terms for your business and your customers
Payment terms are the conditions under which a debt may be paid without penalty. Terms are usually expressed as a number of days from the invoice date or billing date to specify when a customer is expected to pay the minimum payment due.
About Aging by Invoice Date vs. Due Date
BusinessManager has five payment terms for your business to offer customers.
Customers who have Fixed or Revolving payment terms cannot have any other payment terms because the assigned term affects the customer’s account as a whole. In contrast, customers who have Net, Prox, or Same as Cash payment terms may have any of these three terms for individual invoices.
| Payment term | Description | Format / Example | Discount option | When term begins |
|---|---|---|---|---|
|
*Fixed |
A set dollar amount is due each month until the balance is paid. (The amount due is set individually for each customer.) |
<Type> <# of Days in Payment Term> <Payment Term Begins at> Fix 25 B $100 = A minimum payment of $100 is due 25 days from the billing date. |
No |
Billing Date |
|
Net |
Entire balance is due at the end of the term. Net I = Term begins at Invoice Date Net B = Term begins at Billing Date |
<Type> <# of Days in Payment Term> <Payment Term Begins at> <Discount %> <# of Discount Days>. Net w/o discount: Net 30 I = Balance is due 30 days from invoice date. Net 30 B = Balance is due 30 days from billing date. Net w/ discount: Net 30 I 5% 10d = Balance is due 30 days from invoice date; the customer can take a 5% discount if the invoice is paid 10 days from invoice date. Net 30 B 5% 10d = Balance is due 30 days from billing date; the customer can take a 5% discount if the invoice is paid 10 days from the billing date. |
Yes |
Invoice Date or Billing Date |
|
Prox |
Full payment for an invoice is due on a set day of the month – the due date. |
<Type><Day of the Month Payment is Due> <Payment Term Begins at> <Discount %> <Discount Day of the Month> Prox w/o discount: Prox 25th B = Balance is due by the 25th day of the month. Prox w/ discount: Prox 25th B 5% 15th = Balance is due by the 25th day of the month; the customer can take a 5% discount if the invoice is paid by the 15th day of the month. |
Yes |
Billing Date |
|
*Revolving |
Monthly payment is based on a percentage of the balance or a minimum amount, whichever is greater. |
< Type> <# of Days in Payment Term> <Payment Term Begins at> <% Due> <Minimum $ Amount> Rev 25 B 25% $50 = Payment is due 25 days from the billing date; the payment amount is equal to 25% of the balance or a minimum of $50, whichever is greater. |
No |
Billing Date |
|
Same As Cash |
Free financing if fully paid by the due date. No payments are due until the end of the term, and then the entire balance is due. |
<Type> <# of Days in Payment Term> <Payment Term Begins at> SAC 90 I = Same as Cash if balance is paid within 90 days of the invoice date. |
No |
Invoice Date |
NOTE
Zero payment value – A single email notification can be sent to all selected recipients at the end of the day when one or more customers with Fixed payment terms has a $0.00 payment amount or customer(s) with Revolving payment terms has 0% due. Prompt action is needed because the Minimum Payment Due on these customers’ statements will be $0.00 until the Fixed amount or Revolving percent due is changed. Because your business has the payment information, your financial institution should set up these notifications for their contacts and for yours.
