Payment terms

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Payment terms determine conditions under which a seller agrees to accept payment from a customer for goods or services that have been delivered. Payment terms commonly include method of payment, payment schedule, and discounts for early payment.

For example, a seller may require a customer to make the full payment to a specific bank account within 30 days of the goods shipment date, while offering a 2% discount for payment made within 10 days.

In 1C:Drive, you can define separate payment terms for each counterparty. This helps to quickly fill payment terms in business documents related to sales or purchases.

To apply identical payment terms to many counterparties or contracts, you may want to use a payment terms template.

Each sale- or purchase-related document you create in 1C:Drive (such as a sales order or a supplier invoice) automatically includes the payment terms defined for the related counterparty. However, you can specify custom payment terms for a specific document if necessary.

1C:Drive offers a variety of reports to monitor payment terms compliance.

Payment terms for counterparties

Payment terms can be defined either for a counterparty or for a counterparty contract, depending on the counterparty's contract management method:

• If a counterparty has contract management method set to Auto, payment terms are defined for the counterparty.
• If a counterparty has contract management method set to Manual, payment terms are defined separately for each contract it has.

To view payment terms for a counterparty:

1. Open the counterparty's card.
2. Go to the Billing details tab.
3. Click the payment terms link above the Limits section.

To view payment terms for a counterparty contract:

1. Open the counterparty's card.
2. Click Contracts in the link bar.
3. Double-click a contract line.
4. Go to the Billing tab.
5. Click the payment terms link above the Limits section.

Payment terms for a counterparty or contract include the following sections and fields:

General details

• Payment terms template. A quick way to apply a predefined set of payment terms to a counterparty or a contract. For details, see Payment terms templates.
• Payment method. Required method of payment. The list of payment methods includes:
  • Cash. The customer pays the seller in cash.
  • Electronic. The customer transfers payment to the seller's bank account.
  • Direct debit. The customer authorizes the seller to withdraw payment from the customer's bank account.
  • Undefined. The seller accepts any payment method.
• Mandate. A direct debit mandate that permits a seller to debit the counterparty's bank account for a specified amount of money.

  This field is only available if all of the following conditions are met:

  • Payment terms apply to a contract.
  • Contract management method is set to Manual in the counterparty's card.
  • Payment method is set to Direct debit in the contract payment terms.

Payment terms

• Baseline date. The date against which due dates will be calculated in sale- or purchase-related documents (such as sales orders or supplier invoices).
   One of the following:
  • Order posting date. The date when a document is posted. Select this date if a customer is required to make an advance payment within a certain period after the document's posting date.
  • Shipment date/Date required. The date when the order is expected to be delivered. Select this date if a customer is required to make an advance payment within a certain period before the expected shipment date.
     If this date is not available (for example, when you create a sales invoice), Order posting date is used instead.
  • Invoice posting date. The date when an invoice is posted. Select this date if a customer is required to make a payment within a certain period after the invoice's posting date.
  • If this date is not available (for example, when you create a sales order), Order posting date is used instead.
  • Month-end. The end date of the month that includes the date when a document is posted. Select this date if a customer is required to make a payment within a certain period after the end of this month.
  • Quarter-end. The end date of the quarter that includes the date when a document is posted. Select this date if a customer is required to make a payment within a certain period after the end of this quarter.
• Term. Indicates whether the payment is advance or regular. It is filled automatically, depending on Baseline date. You cannot edit it.
• Due period, days. The number of days, starting from the baseline date, when the supplier expects the amount due.
  Note. For Shipment date/Date required, this number is subtracted rather than added to the baseline date.
   For example, if a document's date is January 10, then:

  Baseline date	Due period, days	End of due period
  Order posting date	3	January 13
  Shipment date/Date required	3	January 7
  Invoice posting date	3	January 13
  Month-end	3	February 3
  Quarter-end	3	April 3

• % of payment. The percentage of the total payment amount that is to be paid until the end of the due period.

Early payment discounts

You can also specify discounts for early payment. Such a discount has the following fields:

• Provide EPD via. Discount application method. One of the following:
  • Payment document without VAT adjustment. Discount is registered directly in the payment document. VAT amount is not discounted.
  • Payment document with VAT adjustment. Discount is registered directly in the payment document. VAT amount is discounted.
  • Credit/debit note without VAT adjustment. Payment document is posted for the full undiscounted amount, and the discount is then registered in a credit or debit note. VAT amount (if applicable) is not discounted.
  • Credit/debit note with VAT adjustment. Payment document is posted for the full undiscounted amount, and the discount is then registered in a credit or debit note. The discount may be partially offset against VAT (if applicable).
• Period, days. The number of days, starting from the baseline date, when the customer's payment can be made with a discount.
• Discount, %. The discount.

Once you define the payment terms for a counterparty or a contract, 1C:Drive automatically applies them when creating a document that records a sale to or purchase from this counterparty. For example, a sales order or a subcontractor invoice received.

Creating payment terms for counterparties

To create payment terms for a counterparty or a contract, do the following:

1. Do one of the following:
   • To create payment terms for a counterparty, open the counterparty's card and then go to the Billing details tab.
   • To create payment terms for a counterparty's contract, open the counterparty's card, click Contracts in the link bar, double-click a contract line, and then go to the Billing tab.
2. Click the payment terms link above the Limits section.
3. In the Payment method field, select the expected method of payment.
4. In the Payment terms table, add an item and specify its Baseline date, Due period, days, and % of payment.
    To define an installment payment, add an item for each installment. Just make sure that total % of payment for all installments is exactly 100%.
    For example, you can define payment in three installments:
   • 25% within 10 days of the order's date.
   • 25% within 30 days of the order's date.
   • 50% before the quarter's end.
      Then, the Payment terms table should look like this:
     
5. Optional: If you want to offer a discount for early payment, in the Early payment discounts table, specify Provide EPD via, then add an item and specify its Period, days and Discount, %.
    You can add as many items as you need.
    For example, you can define a 2% discount for payment within 10 days and a 1% discount for payment within 30 days.
6. Click OK.
7. Click Save and close.

Payment terms templates

If you often apply identical payment terms to different counterparties or contracts, you can save them as a payment terms template and then apply it to a counterparty or contract with a single click.

To create a payment terms template:

1. Do one of the following:
   • Open a counterparty's card and then go to the Billing details tab.
   • Open the counterparty's card, click Contracts in the link bar, double-click a contract line, and then go to the Billing tab.
2. Click the payment terms link above the Limits section.
3. In the Payment terms template field, click , then click .
4. Define payment terms in the same way as when you create them. For details, see Payment terms for counterparties.
5. Enter Description. It is recommended that you choose a meaningful name for your template, such as "60% advance 40% in 10 days".
6. Click Save and close.

Once you have a payment terms template created, you can apply it to any counterparty or contract instead of specifying payment terms manually. To apply a template, just select it in the Payment terms template field.

Payment terms in business documents

Payment terms apply to any 1C:Drive document that registers a sale or purchase. For example, each sales order or subcontractor invoice received is governed by own payment terms.

If payment terms apply to a document, they are displayed on the Payment terms tab.

By default, payment terms of a document are prefilled from the counterparty or contract that governs the sale or purchase. However, you can set custom payment terms for a specific document if necessary.

Payment terms in a document include the following fields:

• Set payment terms. Indicates whether payment terms apply to the document.
• Once-off payment. A payment type indicating that the customer pays with a single payment.
• Installments. A payment type indicating that the customer pays with a series of installment payments.
• Payment method. Required method of payment. One of the following:
  • Cash. The customer pays the seller in cash.
  • Electronic. The customer transfers payment to the seller's bank account.
  • Direct debit. The customer authorizes the seller to withdraw payment from the customer's bank account.
  • Undefined. The seller accepts any payment method.
• Cash account. Your company's cash account for receiving payment from the customer or for sending payment to the supplier.
   This field is only available if Payment method is set to Cash.
• Bank account. Your company's bank account for receiving payment from the customer or for sending payment to the supplier.
   This field is only available if Payment method is set to Electronic.
• Due date. Due date of a once-off or installment payment. It is calculated as Baseline date + Due period, days.
• Payment %. Amount of a once-off or installment payment, in % of total payment.
• Payment amount. Amount of a once-off or installment payment, in the document's currency.
• Tax. Tax rate that applies to a once-off or installment payment.
   This field is only available if your company’s accounting policy states that the company is registered for VAT.

Editing payment terms in business documents

In some situations, you may want to edit the payment terms prefilled to a business document from a counterparty or contract. For instance, the common payment terms specified in the customer contract request the customer to make their payment in 15 days after the sales invoice date, but in a specific sale you need the customer to pay in 10 days.

To edit payment terms in a business document, do the following:

1. On the document's Payment terms tab, select the Set payment terms checkbox.
2. In the Payment method field, select the payment method.
3. Specify the other payment terms (Cash account, Bank account).
4. Do any of the following:
   • If you want the customer or your company pay lump sum, click Once-off payment and then, in the Due date field, specify the due date. 1C:Drive sets the Payment % field to 100.
   • If you want the customer or your company pay by schedule, click Installments and then, in the installments table, add an item and specify its Due date and either Payment % or Payment amount.
      You can add as many items as you need. Just make sure that total Payment % for all installments is exactly 100%.
5. Click Save.

Monitoring payment terms compliance

When you have business documents with payment terms specified (for example, sales orders or subcontractor invoices issued), you may want to check whether all payments according to these documents are made fully and on time.

For this purpose, you can use the following reports:

Report	Description	How to open
Accounts receivable	Shows whether a customer has an overdue debt to your company according to sales documents.	Go to Sales. Under Reports, click Accounts receivable.
Accounts receivable aging	Shows a customer's debt amount grouped by time periods.	Go to Sales. Under Reports, click Accounts receivable aging.
Accounts payable	Shows whether your company has overdue debt to its suppliers according to purchase documents.	Go to Purchases. Under Reports, click Accounts payable.
Accounts payable aging	Shows your company's debt amount grouped by time periods.	Go to Purchases. Under Reports, click Accounts payable aging.

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