Vendor terms codes are useful for managing the accounts payable cycle. They can be set for a vendor as a whole, or by the individual invoice.
- Go to File > Vendor > Terms to manage terms codes.
- The A/P Terms Master window will appear.
- Enter an identifier of 2 digits and a description.
- Determine whether this is a “net” or a “prox” terms code.
- A “net” code counts a specific number of days from the invoice date.
- A “prox” code counts the days from the beginning of the calendar month.
- Determine whether to compute a discount on gross amount or on merchandise amount.
- Checking Calc Discount on Gross will result in a higher discount because it considers freight and other amounts.
- Enter a discount percentage if applicable.
- Enter number of net days. This represents the latest due date without being considered overdue.
- Enter number of discount days. This represents the latest due date to take an early payment discount.
- For prox terms there are additional fields because it follows the day of the month rather than the invoice date.
To accommodate extended terms, set up as many codes as needed. The presence of these terms will provide an additional level of cross-reference in the vendor record.
It is recommended to set a terms code for each vendor to expedite the process of entering payables.
- Go to File > Vendor > Master.
- The Vendor Master window will open to the Setup tab on the left.
- Locate the General tab on the bottom. This area contains accounting information.
- Set the Terms field to the code most commonly used for this vendor.
The relevance of a terms code depends on the accuracy of the driving information.
- The invoice date establishes the discount and due dates.
- The gross amount establishes what is considered discountable.
A check batch may be filtered with discount date as the check select criteria
- The available discount on each invoice is displayed.
- A check must be printed on or before the specified discount date.
- Selecting a specific discount date filters the check run to only discounts due on that date
- Selecting a range of discounts shows more options.