Payment terms and instalments on a purchase order

A payment term records when you have agreed to pay a supplier. It can be a label, such as NET30, or it can include instalment rules. A term with rules produces a payment schedule on every purchase order that uses it and feeds the Payment Forecast report. A term without rules prints as text and produces nothing.

Instalment rules and the Payment Forecast report are included in the Pro plan and above. On other plans, the Payment rules window shows a plan note and Add installment is greyed out; the report shows an upgrade invitation instead. A term without rules works on every plan.

Permissions

Creating, editing and deleting payment terms requires the Manage Payment Terms permission. The owner always has it, and the Admin and Purchasing roles include it.

Without this permission, the window is titled Payment terms and only lists the terms, with no row for creating one and no buttons on the rows. Ask the owner for a role that includes the permission or, on plans with per-person permissions, to grant it to you.

Create a payment term

1. Open Catalog, then Suppliers.
2. In the page header, select Payment terms. On smaller screens, this button shows only a card icon.
3. In the Manage Payment Terms window, enter a code in the first box, such as NET30 or 30-70.
4. Add an optional description in the second box.
5. Select Create.

Codes must be unique within your organisation. The check ignores capitalisation, so net30 and NET30 count as the same code.

Add instalment rules

Each instalment rule sets a share of the order to pay and the event that starts the clock. The Rules column shows how many rules a term already has.

1. Open Catalog, then Suppliers, then Payment terms.
2. Hover over the term's row. Three buttons appear at the right of the row; on a touch screen, they are always shown.
3. Select the first button to open the Payment rules window for that term.
4. Select Add installment. The new row is pre-filled with the percentage still missing from 100, an Anchor of Receipt date and an Offset of 30 days.
5. Set the percentage for the instalment.
6. Choose an Anchor: PO date, PO approval date, Invoice date, Receipt date, End of invoice month or End of receipt month.
7. Set Offset (days), the number of days added to the anchor date.
8. Optionally set Day of month to move the resulting date onto a fixed payment day.
9. Optionally add a note.
10. Repeat until the percentages total 100.
11. Select Save.

The Σ figure above the table shows the running total and turns green when the percentages total 100. Save is unavailable until they do, because a term that does not add up to the whole order would forecast the wrong amount of cash. The exception is an empty list: with no rows, Save is available so you can remove the rules from a term.

How the date settings work

The anchor supplies a base date, and the offset is added to it. If you also set Day of month, the result moves to that day within the same month, or to the last day of the month if it is shorter.

For example, an anchor of End of invoice month with an offset of 10 pays ten days after the end of the invoice month. Adding a Day of month of 15 moves it to the 15th of the month those ten days fall into.

An offset can be negative. For example, -30 against Receipt date pays around the shipping date when transit takes about a month. A due date is never allowed to fall before the PO date, so a large negative offset lands on the PO date.

Preview a payment term

The lower half of the Payment rules window previews the instalments. Enter the PO date, Receipt date, Invoice date and Sample total for a typical order. The table shows each instalment's percentage, amount and due date, plus a Computed from column naming the date actually used.

Dates marked (estimated) use a fallback because the real anchor date is not yet known. The preview has no approval-date field, so a rule anchored to PO approval date is shown as computed from the PO date and marked (estimated). On a real approved order, it uses the approval date.

Apply a term to a supplier or order

To set a supplier's default:

1. Open the supplier.
2. Select Edit Supplier.
3. Set the Payment Term field in the Settings section.

When you create a purchase order and choose a supplier, the supplier's default is filled into the order's Payment Term field. You can change it before saving.

To change the term on an existing order:

1. Open the order.
2. Select Edit.
3. Change the Payment Term field in the details card.

The order's own term takes precedence when set; otherwise, the supplier's default applies. If neither is set, the order has no payment schedule.

An order's Payment Term can only be changed while the order is Draft or Pending, in edit mode, with the Create / Edit / Delete Purchase Orders permission. On an approved order, it is shown as read-only text.

Read the payment schedule

Open the purchase order to see Payment schedule in the Invoices & payments card on the left sidebar. On a phone, the card is further down the page, above Documents. The section appears only when the term in force has instalment rules; otherwise, it is left out of the card, which is the usual reason it seems to be missing.

The section heading names the payment term. Each instalment row shows its number, percentage, due date, amount, the rule it came from, the number of the supplier invoice that covers it, and a status. Rule descriptions include Due from receipt and Due on invoice date +30 days.

Not invoiced means no supplier invoice covers the instalment yet. Due means it is invoiced and not yet paid; Overdue means its due date has also passed. Part paid and Paid follow the payments recorded on the order.

If an instalment comes in parts—partly invoiced and partly still to invoice, or covered by more than one invoice—each part appears underneath with its own date and amount.

Estimated dates and payments

A tilde before a date means the date is estimated because the anchor date does not exist yet. An invoice-based instalment falls back to the receipt date, then the expected delivery date, then the PO date. A receipt-based instalment falls back to the expected delivery date, then the PO date. An approval-based instalment falls back to the PO date.

Recording the supplier invoice makes an invoice-based instalment firm. A receipt-based instalment stays estimated until the goods are received. Setting an expected delivery date firms nothing, but moves the guess off the PO date, which otherwise forecasts the payment far too early.

Payments recorded on the order are applied to instalments oldest due date first, the same way the Payment Forecast report applies them, so they always agree on what is paid. A payment larger than what remains on one instalment carries on to the next. When you record a payment, Record payment lists each instalment with its outstanding amount; Pay in full fills in everything outstanding up to the one you pick.

Use the Payment Forecast report

Open Reports, then Payment Forecast to see projected supplier payments by month, with suppliers as rows and months as columns. The report requires the Reports permission.

Unpaid amounts are subtotalled separately for approved orders and orders still in Draft or Pending, showing how much of the forecast depends on orders nobody has approved yet. Amounts already paid appear on their own line for reconciliation against your books; they are not future cash.

The report also splits unpaid amounts into firm and estimated amounts. Firm amounts are instalments backed by a supplier invoice recorded on the order. Estimated amounts are not yet covered by an invoice, so both their dates and values can still move.

Report figures are converted to your organisation's currency so a month containing several currencies still adds up. The order's Invoices & payments card uses the order's own currency, so the figures will not match figure for figure on a foreign-currency order.

The report flags two gaps that make a forecast wrong: suppliers with open orders but no payment term, or a term with no instalment rules, are missing from the figures entirely; open orders with no expected delivery date fall back to the PO date and therefore forecast too early.

Delete a payment term

1. Open Suppliers, then Payment terms.
2. Hover over the term's row.
3. Select the delete button.
4. Confirm.

Deletion is refused while a supplier or purchase order uses the term, including orders that rely on their supplier's term. The message gives both counts. Deleting a term also removes its instalment rules.