Terms Codes

The Terms Codes file stores the terms of payment for On Account customers.
The default terms can be assigned to each customer in the "Codes" window of Customer Information.
During invoice entry, terms are used to determine the DATE DUE of the invoice.
The terms of the invoice are used in the following programs:

• In Customer Payments to determine if the discount is still valid.
• In Calculate Finance Charges to determine whether an invoice is overdue and subject to finance charges.
• In Aged A/R Summary Report to determine the aging of the invoices.
• In Print Statement Letters to determine the gentle and firm dunning letter invoices.

The codes can be maintained in the Terms Codes window on the Customer Management tab of the Configure System Settings.
An operator must be assigned a Security Role that allows permission to the Customer Management - Terms Codes in order to access this table.

Example Terms:

Setup the terms code as follows:

TERMS CODE

Enter a maximum of 1 character.

DESCRIPTION

Describe the terms using a maximum of 30 characters. For example, NET 30.

DUE DAYS

Enter the number of days grace an invoice is given before it is due.
This is calculated from the invoice date.

When the Actual box below is checked, this value represents the actual calendar date and cannot exceed 31, and if 31 is entered the last day of the month applies for months with less days.

ACTUAL

Some firms may rather set a specific date each month that invoices are due. e.g. 15th of the month.

Uncheck this box to use the Due Date calculation as the invoice date plus the specified number of days in the Due Days field.

Check this box to use the value in the Due Days field as an actual date of the month.
The due date then becomes that date in the Month specified following the month of the invoice.
When the Actual box is checked, the Due Days cannot be greater than 31 days, and for months with less days the due date becomes the last day of that month.

MONTHS

This field only applies if the Actual date applies, and can be used to define the month.
Enter the number of months to off-set the actual due date.
e.g. Type 1 to cause the due date to be on the Actual date of the month after the invoiced month.
Or type 2 to cause the due date to be on the Actual date two months after the invoiced month, etc.

DISCOUNT DAYS

Enter the number of days the discount is valid, starting at the date on the invoice.

When the Actual box below is checked, this value represents the actual calendar date and cannot exceed 31, and if 31 is entered the last day of the month applies for months with less days.

ACTUAL

This is similar to the Due Days feature where some firms may rather set a specific discount date each month.

Uncheck this box to use the Discount calculation as the invoice date plus the specified number of days in the Discount Days field.
e.g. "2% 10, NET 30", discount days is 10

Check this box to use the value in the Discount Days field as an actual date. The discount date then becomes that date in the Months specified after the invoice month.
When the Actual box is checked, the Disc Days cannot be greater than 31 days, and for months with less days the discount date becomes the last day of that month.
e.g. "2% ON THE 10TH, NET ON THE 30TH", the discount is eligible until the 10th of the specified month.

MONTHS

This field only applies if the Actual date applies, and can be used to define the month.
Enter the number of months to off-set the actual discount date.
e.g. Type 1 to cause the discount date to be on the Actual date of the month after the invoiced month.
Or type 2 to cause the discount date to be on the Actual date two months after the invoiced month, etc.

In Customer Payments, if payment is received within this number of days, the discount percent is automatically calculated to be given.

DISCOUNT %

Enter the discount percent allowed if the invoice is paid in time. For 2%, type in 2.00

TRADE DISCOUNT window
Window on the Discount% field to set the Trade Discount tax exemptions and Damage Waiver flag as follows.
There are two tax processing methods, each of which impacts this discount window differently.

For a more complete overview of the Trade Discount process, refer to the notes Trade Discounts.

• Standard Taxing:
  For the standard simple tax processing that handles two tax codes.
  The prompts in the window are:

  EXCLUDE TAX 1

  Check this box to exclude Tax code 1 from the Trade Discount. (In Canada when Tax 1 is GST, it should always be excluded from the Trade discount calculation.)
  Uncheck this box to cause Tax 1 on Rentals to be included in the Trade Discount.

  
  EXCLUDE TAX 2

  Check this box to exclude Tax code 2 from the Trade Discount.
  Uncheck this box to cause Tax 2 on Rentals to be included in the Trade Discount.

  
  EXCLUDE DAMAGE WAIVER

  Check this box to exclude the Damage Waiver amount from the Trade Discount.
  Check this box to cause the Damage Waiver amount to be included in the Trade Discount.

• Enhanced Tax processing:
  The purpose of the Enhanced Tax method is to allow more than two tax codes to be tracked according to Location, and to be charged on products, services, and Damage Waivers, and to allow for tax exemptions on any or all of these charges.
  This tax method can be activated in the Company Taxing Parameters.
  When activated, the prompts in the Trade Discount tax window are:

  EXEMPT TAX CODES

  Window to list any tax codes that should be exempt for Trade Discounts for this Terms code.
  Multiple tax code exemptions can be entered.

  
  EXCLUDE DAMAGE WAIVER

  Check this box to exclude the Damage Waiver amount from the Trade Discount.
  Check this box to cause the Damage Waiver amount to be included in the Trade Discount.

For more information on this discount feature refer to the Trade Discounts.

GENTLE & FIRM DUNNING PAST DUE

Click the EXP/CON button to access the two dunning period fields for each terms record, that can be used to define the days at which an over-due invoice is eligible to be included in a 'gentle' or a 'firm' dunning letter when generated from Print Statement Letters.

A dunning letter is a notification sent to a customer, stating that the customer is overdue in paying an account receivable. Dunning letters typically become stronger in tone as deadlines approach or are passed.
Refer to Statement Letters for information on the configuration and use of dunning letters.

Note: If your firm uses both 'gentle' and 'firm' dunning letters, a customer may receive both types of letters if there are over-due invoices that fall in both 'Past Due' periods.

Note: For CASH customers in Customer Information, setup the terms of payment as "On Receipt" with Due Days, Discount Days and Discount% all equal to zero.