List Payment Terms
Purpose
Payment terms spell out the terms of the sale to the customer. They can also be used to reward customers who pay on time or early. If a particular customer pays the bill within the allotted time, he or she is given a certain discount on the bill.
Usage
1. For each payment term, enter the appropriate information.
Description - Give a name to each of the payment terms here. We recommend that, instead of using a name like Bob’s Terms, you use a descriptive name. A descriptive name is something along the lines of 2% 10 Net 30, or anything else that thoroughly and succinctly describes the payment terms. In this example, 2% 10 Net 30 means that if the bill is paid within ten days, it will be discounted by two percent; the entire bill (net) is due within thirty days. If they do not pay the entire bill by the discount date, then they must pay the entire invoice (i.e. no discounts) within thirty days.
Net Days - This specifies how many days the customer has to pay the bill in total.
Discount % - this tells what discount you are willing to give the customer if he or she pays the bill within the number of days specified.
Discount Days - this is the number of days the customer has to pay the bill before the discount expires.