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Understanding Payment Terms in VinAR-ERP

A Payment Term is a predefined schedule that determines how and when payments should be made for an invoice or order. It helps businesses plan cash flow, manage credit terms, and automate payment tracking.

For example, a business might require:

  • 50% payment on shipping
  • 50% payment on delivery

These rules ensure that payments are collected in a structured and timely manner.

Where Are Payment Terms Used?

Payment Terms can be applied to various financial documents, including:

  • Sales Invoice
  • Purchase Invoice
  • Sales Order
  • Purchase Order
  • Quotation

To access Payment Terms in VinAR-ERP, go to:
Home > Accounting > Accounting Masters > Payment Term

How to Create a Payment Term

Step-by-Step Guide

  1. Navigate to the Payment Term list and click New.
  2. Enter a name (e.g., “50% Post-Shipment”).
  3. Define the invoice portion (e.g., entering 50 means 50% of the total invoice amount).
  4. Choose a due date type:
    • Days after invoice date – Due a certain number of days after the invoice date.
    • Days after the end of the invoice month – Due a set number of days after the month’s end.
    • Months after the end of the invoice month – Due a specific number of months after the month’s end.
  5. Set the credit days (optional) – Number of days allowed before payment is due.
  6. Add a description (optional) to clarify the payment condition.
  7. Click Save.

Example: Setting Payment Terms

If you set:

  • 50% due 10 days after the invoice date
  • 50% due 30 days after the invoice date

Then, for a $10,000 invoice on March 1st:

  • $5,000 is due on March 11th
  • $5,000 is due on March 31st

This structured approach ensures clarity for both customers and suppliers.

Setting Up Discounts for Early Payments

VinAR-ERP allows businesses to offer discounts for early payments. You can configure:

  • Discount Type – Percentage or Fixed Amount.
  • Discount Value – e.g., 10% or ₹5,000.
  • Discount Validity – The number of days within which payment must be made to qualify for the discount.

For example, if a 10% discount is valid for payments made within 10 days, a customer who pays early will only need to pay ₹9,000 instead of ₹10,000.

🔹 Important Note: Discounts only apply when payments are made directly against an individual invoice.

Payment Terms in Document Conversions

When converting documents in the sales or purchase cycle (e.g., a Quotation to a Sales Order), the Payment Terms will be copied automatically. However, the due date may need to be updated based on the new document.

For convenience, you can set up a Payment Terms Template to quickly apply payment schedules across multiple transactions.

Adding Payment Terms to Sales & Purchase Transactions

Once a Payment Terms Template is created, it can be applied to:
✅ Sales Invoices
✅ Purchase Invoices
✅ Orders and Quotations

The system will automatically calculate the payment schedule, ensuring each installment has a due date and follows the agreed-upon terms.

Key Benefits of Using Payment Terms in VinAR-ERP

✅ Automates payment tracking – No need for manual follow-ups.
✅ Improves cash flow management – Helps businesses plan income and expenses.
✅ Reduces payment delays – Clearly defines due dates and payment expectations.
✅ Enhances customer relationships – Provides flexible payment options and potential early-payment discounts.

By using Payment Terms, businesses can simplify financial operations and ensure a smooth payment process.

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