Lesson 4

Configuration of Credit Terms

Back to F050: Basic Financial Configuration

Lesson 4: Configuration of Credit Terms

In Acumatica ERP, users have to define the credit terms to be used by vendors in their relations with the company and by the company in its relations with customers. In this lesson, you will find general information on credit terms and activities that provides instructions on how to implement credit terms in the system.

Credit Terms: General Information

The credit terms that a company offers to customers and the credit terms the company uses to pay vendors need to be defined in Acumatica ERP. When users select credit terms in a document, the credit terms provide automatic calculation of the due date and the end date of the cash discount period, as well as the cash discount amount in the document. You can define credit terms for payments as having a single installment or multiple installments.

Learning Objectives

In this chapter, you will learn how to define credit terms in the system.

Applicable Scenarios

You define credit terms before you start operations in the system and when new credit terms need to be defined for customers and vendors.

Creation of Credit Terms

These are the general steps you need to perform to create a set of credit terms on the Credit Terms (CS206500) form:

  1. You enter a descriptive identifier for the credit terms you want to configure.
  2. You define the scope of the credit terms: whether they can be applied to only customer documents, only vendor documents, or both types of documents.
  3. You specify how a due date is calculated for a document.
  4. Optional: You configure the cash discount conditions for single-installment credit terms.
  5. Optional: If needed, you change the default installment type of credit terms, which is Single, to Multiple; you then define the number of installments and their payment schedule.
    If the company has been operating for some time, it already has established its credit terms. We recommend that you compare the credit terms the company offers to customers and the credit terms offered to the company by vendors, looking for overlap, because in Acumatica ERP, you can use the same credit terms for both customer payments and payments to vendors.

Credit Terms: To Define Single-Installment Credit Terms

In this activity, you will learn how to define single-installment credit terms, which can be used by vendors in their relations with the company and by the company in its relations with customers. Lesson 4: Configuration of Credit Terms | 28

Story

Suppose that SweetLife has agreements with its customers stipulating that the full amount of each document will be paid within 30 days; no cash discounts are provided. Acting as an administrator, you have to define one set of credit terms, which indicate that the full amount of each document must be paid within 30 days.

Process Overview

In this activity, on the Credit Terms (CS206500) form, you will create the credit terms for the new company.

Step: Defining Credit Terms To define the needed set of credit terms, do the following:

  1. Sign in to the company you have prepared with the admin username.
  2. On the Credit Terms (CS206500) form, add a new record.
  3. In the General Settings section, specify the following settings:
  • Terms ID: 30D
  • Description: 30 Days
  1. In the Due Day Settings section, specify the following settings:
  • Due Day Type: Fixed Number of Days
  • Due Day 1: 30
  1. In the Installment Type box of the Installment Settings section, make sure that Single is selected.
  2. On the form toolbar, click Save.

Activity Recap

In this activity, we have illustrated how to set up the 30D credit terms for a fixed number of days and with the Single installment type.

Credit Terms: To Define Credit Terms with a Cash Discount

In this activity, you will learn how to define credit terms with a cash discount, which can be used by vendors in their relations with the company and by the company in its relations with customers.

Story

Suppose that SweetLife has agreements with its vendors stipulating that the company pays the full amount of each document within 30 days. A 3% cash discount is provided by the vendor if a document is fully paid within 10 days. Acting as an administrator, you have to define one set of credit terms, which indicate that the full amount of each document must be paid within 30 days and a cash discount can be taken if a document is paid within 10 days.

Process Overview

In this activity, on the Credit Terms (CS206500) form, you will create the credit terms for the new company. Lesson 4: Configuration of Credit Terms | 29

Step: Defining Credit Terms with a Cash Discount To define the needed set of credit terms, do the following:

  1. Sign in to the company you have prepared with the admin username.
  2. On the Credit Terms (CS206500) form, add a new record.
  3. In the General Settings section, specify the following settings:
  • Terms ID: 310N30
  • Description: 3% 10 Days - Net 30
  1. In the Due Day Settings section, specify the following settings:
  • Due Day Type: Fixed Number of Days
  • Due Day 1: 30
  1. In the Cash Discount Settings section, specify the following settings:
  • Discount Day: 10
  • Discount %: 3
  1. In the Installment Type box of the Installment Settings section, make sure that Single is selected.
  2. On the form toolbar, click Save.
    When the applicable credit terms have been defined in the system, vendor and customer classes (and vendors and customers) can be created.

Activity Recap

In this activity, we have illustrated how to set up the 310N30 credit terms for a fixed number of days, a cash discount, and with the Single installment type. Lesson 5: Configuration of Accounts Payable | 30