OpenPro Application Guide Accounts Receivables (AR)

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=====Chapter 10: Terms=====

====Introduction====
The Terms selection enables you to enter terms codes. <Terms> are rules that describe how and when payment of an invoice is due and whether early payment entitles the customer to a discount (and if so, how much and how early).

<Terms> does //not// refer to your rules about finance charges for late payments (for that, see the “Finance Charges” chapter).

**NOTE:** You must make at least one entry in this selection, even if you do not use terms, since every Customers entry must have its own default terms code. If no payment terms apply, enter a dummy terms code such as **N/A**.

You can define as many different terms as you want, and assign a description and a code to each one. When you enter an invoice, you assign a terms code to that invoice (or simply accept the customer’s default terms code). This causes the description of the terms to print on the invoice. It also [1] allows the invoice to be aged, and [2] applies the discount upon payment, if the customer is eligible.

There are two general methods used to specify payment terms:

  - “Standard” Terms: An invoice is due a certain number of days after the invoice date.
  - “Proximo” Terms: An invoice is due on a specific day in the month after the month of the invoice date (“Proximo” is Latin for “of the next month”).

====Navigation====
Take these steps to display or maintain Terms Codes:

  * On the main menu on the left side, click on “Rules Setup”
  * Click on “Maintenance”
  * Click on “Terms Codes”
  * The View Terms screen will be displayed
    * To view or change the details of an existing Terms Code, click “Edit” next to the code
    * To add a new Terms Codes, click on “Add new Terms”

====The Terms Codes Screen====

{{products:financial:accounts-receivable:arg:arg-1001.png}}

====Entry of “Standard” Terms====
“Standard” Terms are the most commonly used. They specify the number of elapsed days – beginning with the invoice date – until discounted payments and full payments are due.

//Examples://\\
Net 30\\
2/10 Net 30

===How to enter “Standard” Terms:===

**Discount Days/DOM**
Enter the number of days during which a discount is available.

**Total Days/DOM**
Enter the total number of days to make the full payment.

**Discount Percent**
Enter the discount percentage.

//Examples://\\
Terms: Net 30\\
Discount Days / DOM blank\\
Total Days / DOM 30\\
Discount Percentage 0\\
Proximo Terms not checked\\

Terms: 2/10 Net 30\\
Discount Days / DOM 10\\
Total Days / DOM 30\\
Discount Percentage 2.0\\
Proximo Terms not checked\\

====Entry of “Proximo” Terms====
“Proximo” Terms are less commonly used. Instead of specifying a number of elapsed days, they specify a fixed day of the month (DOM) by which discounted payments and full payments are due.

//Examples://\\
Due on the 30th\\
2% discount by the 15th/Due in full on the 30th\\

**Note:** The days of the month specified in Proximo terms are always those days in the month following the month of the invoice date.

For example, if two invoices are received on July 1 & July 28 with terms that call for payment on the 30th, both invoices are due on August 30.

===How to enter “Proximo” Terms:===

**Discount Days/DOM**
Enter the day of the following month by when a discount is available.

**Total Days/DOM**
Enter the day of the following month by when the full payment is due.

**Discount Percent**
Enter the discount percentage.

//Examples://\\
Terms: Due on the 30th\\
Discount Days / DOM blank\\
Total Days / DOM 30\\
Discount Percentage 0\\
Proximo Terms checked\\

Terms: 2% discount by the 15th / Due on the 30th\\
Discount Days / DOM 15\\
Total Days / DOM 30\\
Discount Percentage 2.0\\
Proximo Terms checked\\

====Enforcing Discounts====
By default, the system will allow discounts until the final due date.

For example, if terms are 2/10 Net 30, the 2% discount will be allowed for 30 days – not just 10 – after the invoice date.

If this is not desired, a system option can be activated to strictly enforce discount terms. To activate this option, follow these steps:

  * On the main menu on the left side, click on “Rules Setup”
  * Click on “Maintenance”
  * Click on “Table”
  * Under the “APOPTION” Table, enter the “TERMDISC” Code with the values as shown below:

{{products:financial:accounts-receivable:arg:arg-1002.png}}

Once this option is activated, discounts will be strictly enforced. For example, if terms are 2/10 Net 30, the 2% discount will only be allowed for 10 days – exactly as specified in the terms.

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~~socialite~~