Jonathan
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Payment Terms and Installment Plans documentations are merged into one page and completely rewritten.
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109 lines
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===================================
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Payment Terms and Installment Plans
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===================================
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**Payment Terms** regroup all the conditions under which a sale is completed and paid. They can be
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applied to sales orders, customer invoices, and supplier bills, mostly to ensure that they will be
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correctly paid, and on time. These conditions cover:
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- The due date
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- Some discounts
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- Any other condition on the payment
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Defining Payment Terms automates the computation of payments due dates, both for invoices and bills.
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This is particularly helpful in managing installment plans.
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An **installment plan** allows the customers to pay an invoice in parts, with the amounts and
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payment dates defined beforehand by the seller.
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**Examples of Payment Terms:**
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- | **Immediate Payment**
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| The full payment is due on the day of the invoice's issuance.
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- | **15 Days** (or **Net 15**)
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| The full payment is due 15 days after the invoice date.
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- | **21 MFI**
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| The full payment is due by the 21st of the month following the invoice date.
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- | **2% 10, Net 30 EOM**
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| 2% :doc:`cash discount <cash_discounts>` if the payment is received within ten days. Otherwise,
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the full payment is due at the end of the month following the invoice date.
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.. note::
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Payment terms are not to be confused with payment in several parts. If, for a specific order, you
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invoice the customer in two parts, that is nor a payment term nor an installment plan, but an
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invoicing policy.
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Configuration
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=============
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Go to :menuselection:`Accounting --> Configuration --> Payment Terms` and click on *Create*.
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The **Description on the Invoice** is the displayed text on a sale order, invoice, or bill.
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In the **Terms** section, you can add a set of rules, that we call *terms*, to define what needs to
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be paid, and by which due date.
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To add a term, click on *Add a line*, and define its *Type*, *Value*, and *Due Date Computation*.
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.. important::
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- Terms are computed in the order they are set up.
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- The **balance** should always be used for the last line.
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In the following example, 30% of the invoice is due on the day of issuance of the invoice, and the
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balance is due at the end of the following month.
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.. image:: media/payment_terms_configuration.png
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:align: center
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:alt: Example of payment terms. The last line is the balance due the 31st of the following month.
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Using Payment Terms
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===================
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Payment Terms can be defined with the **Payment Terms** field on:
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- | **Contacts**
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| To set specific payment terms automatically on new sales orders, invoices, and bills of a
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contact. This can be modified in the contact’s *Form View*, under the *Sales & Purchase* tab.
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- | **Quotations**
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| To set specific payment terms automatically on all invoices generated from a quotation.
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- | **Customer Invoices**
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| To set specific payment terms on an invoice.
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- | **Vendor Bills**
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| To set specific payment terms on a bill. This is mostly useful when you need to manage vendor
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terms with several installments. Otherwise, setting the *Due Date* is enough.
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Journal Entries
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===============
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Invoices with specific Payment Terms generate different *Journal Entries*, with one *Journal Item*
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for each different *Due Date* computed.
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This makes for easier *Follow-ups* and *Reconciliation* since Odoo takes each due date into account,
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rather than just the balance due date.
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In the following example, an invoice of $1000 has been issued with the following payment terms:
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30% of the invoice is due on the day of issuance of the invoice, and the balance is due at the end
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of the following month.
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.. image:: media/payment_terms_journal_entry.png
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:align: center
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:alt: Example of an invoice with specific Payment Terms. The amount debited on the Account
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Receivable is split in several Journal Items.
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The $1000 debited on the Account Receivable is split into two distinct *Journal Items*. Both of
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them have their own **Due Date**.
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+----------------------+-------------+---------+---------+
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| Account | Due date | Debit | Credit |
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+======================+=============+=========+=========+
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| Account Receivable | February 21 | 300 | |
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+----------------------+-------------+---------+---------+
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| Account Receivable | March 31 | 700 | |
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+----------------------+-------------+---------+---------+
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| Product Sales | | | 1000 |
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+----------------------+-------------+---------+---------+
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This allows for easier reconciliation and to accurately follow up late payments.
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.. seealso::
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- :doc:`cash_discounts`
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- `Odoo Learn: Terms and Conditions (T&C) and Payment Terms <https://www.odoo.com/r/fpv>`_ |