Mastering Payment Terms in Business Central - Insider Tips!

Table of Contents

1. Introduction
2. Overview of Payment Terms in Business Central
3. Setting Up Payment Terms
   • Creating Payment Terms Codes
   • Descriptions of Payment Terms Codes
   • Calculating Due Dates
4. Using Payment Terms on Sales and Purchasing Invoices
   • Customer Payment Terms
   • Vendor Payment Terms
   • Document Date vs Posting Date
5. Advanced Payment Term Calculations
   • Early Payment Discounts
   • Discount Due Date Calculation
   • Discount Percentage Calculation
6. Special Formulas for Payment Terms
   • Combination of Letters and Numbers
   • Current Indicator (c)
   • Examples of Payment Term Calculations
7. Creative Use of Payment Terms
   • Customizing Due Dates
   • Using Formulas for Creative Calculations
   • Using Minus Sign to Adjust Due Dates
8. Conclusion

Payment Terms in Business Central: A Guide to Setting Up and Using Them

Payment terms play a crucial role in businesses, especially when it comes to managing sales and purchasing. In this guide, we will explore the payment terms functionality within Business Central, a popular ERP system. We will discuss how to set up payment terms, calculate due dates, and utilize them on sales and purchasing invoices. Additionally, we'll Delve into advanced payment term calculations and provide examples to help You understand their practical applications. By the end of this guide, you will have a comprehensive understanding of payment terms and be able to effectively use them in your business processes.

1. Introduction

Business Central is a powerful ERP system that offers various features and functionalities to streamline business operations. One such feature is the ability to define and utilize payment terms. Payment terms determine the due date or discount due date for sales and purchasing invoices. By understanding how payment terms work and utilizing them efficiently, businesses can effectively manage their cash flow and maintain good relationships with customers and vendors.

2. Overview of Payment Terms in Business Central

Payment terms in Business Central are stored in a single table that is used by both sales and purchasing processes. This means that the same set of payment terms can be applied to both customers and vendors. However, payment terms can be customized for specific documents if needed. The due date for invoices is calculated Based on the document date, and not the posting date. It's important to note this distinction to ensure accurate due date calculations.

3. Setting Up Payment Terms

Before using payment terms in your sales and purchasing processes, it's essential to set them up correctly in Business Central. The first step is to Create payment terms codes that will be used to reference specific terms. Each payment term code should have a description that provides additional information about how the terms are calculated. The due date calculation, discount due date calculation, and discount percentage are key elements to consider when setting up payment terms.

4. Using Payment Terms on Sales and Purchasing Invoices

Payment terms are applied to sales and purchasing invoices to determine the due date and any applicable discounts. On the customer side, payment terms are set up in the customer card, while on the vendor side, they are set up in the vendor card. When creating sales or purchasing documents, such as invoices, the payment terms code from the Relevant card is automatically populated. The due date is calculated based on the document date and the specific payment terms code.

5. Advanced Payment Term Calculations

Business Central offers various ways to calculate due dates and discounts using payment terms. Early payment discounts allow businesses to offer discounts to customers for early payments. The discount due date calculation determines the date by which the payment needs to be made to avail the discount. The discount percentage calculation specifies the percentage of the discount offered. These advanced calculations provide flexibility and enable businesses to incentivize prompt payments.

6. Special Formulas for Payment Terms

Payment term calculations in Business Central use a combination of letters and numbers to define formulas. Each letter represents a unit of time such as days (d), weeks (w), or months (m). The number preceding the unit indicates the quantity of that unit to be added or subtracted. The 'c' letter is a special indicator that represents the current month. Businesses can leverage these formulas to customize due dates based on their specific requirements.

7. Creative Use of Payment Terms

Payment terms offer an opportunity for businesses to get creative with their due date calculations. By utilizing the available formulas and indicators, businesses can customize due dates based on unique criteria. This flexibility allows for efficient cash flow management and better alignment with the business's financial goals. Additionally, businesses can adjust due dates by using the minus sign to accommodate specific circumstances.

8. Conclusion

Payment terms are an essential aspect of managing cash flow and maintaining healthy relationships with customers and vendors. Business Central provides robust functionality to set up and utilize payment terms effectively. By understanding the calculation methods and using them creatively, businesses can ensure Timely payments and leverage early payment discounts. Implementing proper payment term strategies can contribute to overall business success.

Highlights

• Understand the importance of payment terms in business operations
• Learn how to set up and utilize payment terms in Business Central
• Discover advanced payment term calculations for early payment discounts
• Utilize special formulas to customize due dates based on specific requirements
• Get creative with payment term calculations for efficient cash flow management

FAQ

Q: Can payment terms be customized for individual customers or vendors? A: Yes, payment terms can be set up on the customer or vendor cards in Business Central. However, the same payment terms can be applied to multiple customers or vendors if desired. Customization at the document level is also possible.

Q: How are due dates calculated in Business Central? A: Due dates are calculated based on the document date and the specific payment terms code assigned to the customer or vendor. The system uses formulas and indicators to determine the appropriate due date.

Q: Can payment terms be adjusted after a sales or purchasing invoice is created? A: Yes, payment terms can be changed on the sales or purchasing invoice if needed. However, it's important to consider the impact on due dates and discounts before making any adjustments.

Q: Are there any limitations to the formulas used in payment term calculations? A: The formulas used in payment term calculations follow a standard syntax that combines letters and numbers. As long as the formula follows this syntax, businesses can get creative with the calculations based on their requirements.