Payment terms help you decide when payments are due and if discounts apply for early payments. Dynamics 365 Finance comes with common payment methods, but you can also add your own to fit your business needs.
When you set payment terms for a customer, those terms automatically apply to all their sales and purchase documents. The dates on these documents are used to figure out when payments are due, helping you keep track of finances easily.
Primary steps to establish Payment terms include:
- Setting up a Payment Day allows you to choose a specific day of the week (like Monday or Tuesday) or a fixed date in the month (such as the 5th or 10th) for customers to make their payments.
- Defining your Payment Terms helps automatically calculate the due dates for customer payments, ensuring clarity and consistency in managing transactions.
How to setup payment terms?
For instance: Invoice due in 30 days from end of the month.
Navigate to:
Accounts receivable > Payment setup >Terms of payment
Create New
Choose the Payment Method as “Current Month” and set the Days to 30.
Now, let’s verify the Invoice Due Date by creating a Free Text Invoice to see how the system calculates and assigns the due date.
The Invoice Date was set to 24/01/2024, and the system calculated the Due Date as 03/02/2024. This was determined by adding 30 days to the end of the current month (31/01/2024 + 30 days).
