Payment Terms can be summarised as an agreement kept when sale or purchase occurs. Business transaction in real world can only be completed when the parties involved agrees to conditions of payment. Payment Terms not only ensures that payments are made at right time but is also very helpful in planning those installments. On basis of many factors organisations create different payment terms to different customers, vendors etc. Odoo covers creating all conditions on payment and add any discount that might be applied.
Accounting->Configuration ->Management ->Payment Terms ->Create.
By following the above path, we are able to see and edit all created Payment Terms as well as create new ones.
Creating New Payment Terms:-
After pressing on create button, you can add Payment Terms, select Company as well as add a description for the customer. We have different Term Types:- Balance, Percent, and Fixed Amount. You can select any of those according to requirements.
a. days after the invoice date
The payment should be done within the specified days after the invoice date.
b. days after the end of the invoice month
The amount should be paid within specified days after the end of the invoice month.
c. of the following month
The payment should be done within stipulated day of following month
d. of the current month
The amount should be paid within stipulated day of current month
Let us look at an example of term type in detail:-
Payment Terms:- 30%Now, Balance 60 days
Payment at time of invoice:-
Value describes the percentage of the total amount that has to be paid at the time of invoice.
Balance Payment Duration:-
Due Date Computation shows the number of days allocated for payment of the remaining amount.
Once the Payment Term is created click on Save Button. Thus it will be visible for use in further cases of billing.
Customers Payment Terms:-
We can set Payment Terms to a particular customer if all our future orders are going to be dealt with the same terms.
Sales –>Customers –>Create.
a. Fill all information of customer / vendor
b. Select Payment Terms from the ones created and listed below in the Payment Terms Field.
c. Once selected, it will automatically appear in all orders, purchase of all future sales, purchases from/to that particular vendor/Customer.
The payment Terms thus allow us to manage large capital within the period as agreed and stated in Payment Terms making the life of the user easy.