Accounts Receivable

Trading Terms

Trading Terms contain descriptive details and settings for the various sets of debtor trading terms that you want to use when providing credit to your customers.

You may specify ‘Standard Trading Terms’ for your business as a System Option. These are used for all Customers that do not have individual settings.

You can then override those standard terms per Customer Account if you need to provide specific customers extended terms, or if you need more control and less risk with some customers by setting up shorter terms and credit checking.

Trading Terms are used by Sales Order Entry, Point Of Sale and eCommerce systems to perform credit checks. They work in conjunction with a customer’s Credit Limit to determine the state of their account.

Example

Say you give all your customers 14 days to pay an invoice. You would set up a Trading Term entry for ’14 Days’ and set that up as the default system-wide setting trading terms to use.

Then say you have some major customer accounts who you are happy to give more time to pay invoices (30 days for example), then you would set up a Trading Term of ’30 Days’ and assign those terms to the major customer accounts.

If you have some other customers that you are only willing to deal with on a cash terms basis, then you can set up ‘Cash’ or ‘Cash On Delivery’ terms and assign those terms to the customer accounts.

NOTE: Just because you create a Trading Terms entry called ’30 Days’ does not mean it has to be exactly 30 days credit. You can then set that terms entry up to actually have 40 days credit checking if you want. You could have multiple ’30 Days’ term codes each giving different ‘Days Checking’ based on the relationship you have with those Customers. So remember there is a distinction between the “description” and the actual days checking the system will do.

Minimum Requirements

There should be at least one ‘Trading Terms’ definition and that should be set as the default company-wide terms in System Options.

Changing Established Data

You can add more terms if needed at any future point, however take the following into consideration:

  • if you change terms from 30 days to 7 days on a customer account that has outstanding ledger items, and those items are already 7+ days old, the next order entered for the customer will fail credit checking.

Panel Options

  • Standard panel features
  • Maintenance
  • Views
    • Audit – shows an audit of data changes made over time to the term currently being viewed
    • Where used – shows a list of customers who are trading under the term currently being viewed. Note: customers with no specific (override) terms are listed under the terms that are defined as the standard company default terms.
  • Reports
    • List Trading Terms
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