Payment and Credit Terms are the conditions that indicate when a payment is due. These are typically applied to invoices. Payment Terms are set on your Vendors and POs, and reflect the agreements between you and your vendors. Similarly, Credit Terms are set on your Wholesale Customers, and reflect the agreement between you and the buyer regarding when a payment should be made.
Create and Manage Payment/Credit Terms
You can create new Payment/Credit Terms, or modify and delete the existing ones.
- Go to Settings > Client Settings > Show more… > Payment/Credit Terms.
- To create new Terms, click the plus icon in the upper right corner.
- In the Add New Payment and Credit Terms dialog box, complete the required fields. Information about each field can be found in the table below.
FIELD NAME DEFINITION Terms A name for the term that will appear in the relevant drop downs Description A brief description of the term Days to Pay The agreement for the period of time in which a payment needs to be made Days to Pay (Discount) The period of time in which a payment needs to be made in order to be eligible for a Discount (for advance payment) Discount The Discount Amount to be applied if an advance payment is made
- To edit existing terms, go to the Payment and Credit Terms panel, navigate to the terms you want to change, and click the respective pencil icon.
- To remove Payment/Credit Terms that are no longer in use, click the item’s bin icon.
- Click Save.
Add Payment Terms for Vendors
You can set the Payment Terms at the Vendor level. When creating a new PO, Payment Terms will be pulled from the related vendor. However, you can change these terms if necessary.
- Go to Purchasing > Vendors > Manage Vendors.
- Open the vendor you want to adjust the Payment Terms for.
- In the upper right, click Edit.
- Go to the Payment panel.
- In the Payment Terms field, select the appropriate terms.
- Alternatively, click the plus icon to create new Payment Terms. Once created, the newly configured Payment Terms line will appear under the Payments/Credit Terms configuration.
- Save the changes.
Add Payment Terms to POs
You can specify the Payment Terms when you create or edit a Purchase Order. If Payment Terms are set for the selected vendor, the Payment Terms field will be automatically populated.
If you wan to display the Payment Terms on the Purchase Order PDF form, enable the Print Payment Terms on PO PDF Client Setting.
- Go to Purchasing > Create New Purchase Order.
- In the General step of the PO creation wizard, select the existing Payment Terms. Alternatively, click the plus icon to create new Payment Terms. Once created, the newly configured Payment Terms line will appear under the Payments/Credit Terms configuration.
- To specify or change the Payment Terms at the PO level, go to the PO’s home page.
- Select the appropriate Payment Terms on the Billing & Payments panel.
- Save the changes.
Add Credit Terms to Wholesale Customers
You can use the pre-configured Payment Terms/Credit Terms for your wholesale customers to flag the orders that exceed the Credit Terms.
If a customer has not completely paid off the Credit Limit before the Credit Term ends up, you can review the list of unpaid orders for that customer by clicking the respective icon in the customer’s Orders toolbar. Thus, you can prevent Orders from shipping.
Enabling the Allow to Create over Credit Limit WholeSale Orders Client Setting will let you create orders for customers with overdue payments. To restrict this, disable this Client Setting.
Follow the steps below to add specific Credit Terms for an individual customer.
- Go to Customers > Manage Customers.
- Open the requested customer. Alternatively, create a new customer.
- In the upper right, click Edit.
- On the customer’s home page, refer to the Wholesale Options panel.
This panel will not appear unless your customer is wholesale and the relevant Wholesale Customer option is selected. For details, refer to Wholesale Customers.
- In the Credit Term field, select the pre-configured Payment Terms/Credit Terms that reflect the period of time the credit is extended.
- In the Credit Limit field, enter the amount of credit extended.
- Click the Billing Cycle Start Date field, and select the date when the Credit Terms will start.
- In the upper right, click Save.
Understanding payment terms
Payment terms refer to the amount of time extended to pay a wholesaler. Payment terms agreements between you and your vendor can be applied to a PO. They can also be added to wholesale customers to flag orders that exceed the payment terms. Sometimes, discounts are applied if the payment is completed by a set time frame.
There are two important terms to know when adding or configuring payment terms in Sellercloud:
- Credit Limit refers to the amount of credit extended.
- Credit Term is the period of time the credit is extended.
For example, a customer may have a $5,000 credit over 30 days. Even if the customer uses only $2,500 in the 30 days he must still pay the balance before being issued credit again. At this point Sellercloud will not prevent an order from being shipped when exceeding the credit term.
However, you can track the orders by opening the customers account and clicking on Orders in the side menu. If the customer went over the limit, a link will appear where you can view those orders and manually prevent their shipping.
Applying payment terms to POs
- Go to Customers > Open a Customer.
- Select the payment term from the Credit Term dropdown. The Days to Pay value will be used as the term value. Configure a credit limit and select a billing cycle date to begin the credit term.
- When the payment term and credit is exceeded, you will not be able to create an order for this customer. This can be controlled by Allow to create over Credit Limit WholeSale orders in Client Settings
- If the order is cancelled or returned, the customer’s account will be credited with the order total