You can specify customer credit terms, for the products and services that you sell, by entering your default credit terms at company
A self-balancing accounting unit within your organization. level, and any specific credit terms, for those customer accounts that have them, at individual accountIn this context, accounts are organizations or people that you conduct business with, such as customers or vendors. Account is a standard Salesforce object. FinancialForce accounts can be any Account Record Type. level.
You can also specify vendor credit terms, for the products and services that you purchase, but only at account level.
Due Dates
The standard credit termsSet of terms used to determine due dates and discounts for the goods and services bought or sold. Terms can be set at account level for vendors and/or company level for customers. defined on an account or company are used to calculate due dates for the following documents:
- Sales Invoices: The default due date is calculated using the invoice date and the standard credit terms on the customer account. If credit terms do not exist on the customer account, the standard credit terms for the current companyThe company in which you are working. This is represented by the company queue to which you, and new instances of objects you create, are assigned. are used instead.
- Payable Invoices: The default due date is calculated using the invoice date and the standard credit terms on the vendor account.
- Payable Credit Notes: The default due date is calculated using the credit note date and the standard credit terms on the vendor account.
Settlement Discounts
The credit terms defined at either account or company level are used to calculate potential settlement discounts and dates for the following documents:
- Sales Invoices and Credit Notes: When you post sales invoices and credit notes, potential settlement discounts and dates are calculated using the document date and the customer's credit terms, or if these are not set, using the credit terms for the current company. The discount information is stored on the transaction line for use in cash matching and is included when printing an invoice or credit note.
- Payable Invoices and Credit Notes: When you post payable invoices and credit notes, potential settlement discounts and dates are calculated using the document date and the vendor's credit terms. The discount information is stored on the transaction line for use according to the payment date set in Payments or according to the discount date set in Cash Matching.
Potential settlement discounts are calculated in both account and document currency. They can be seen, along with the discount dates, in the relevant sections of the transaction line item. If the tax regime of your current company is VAT, and the account contained on an invoice or credit note uses the "Net of Discount" tax calculation method, the settlement discount will be calculated based on the document’s net total. Otherwise, the settlement discount will be calculated based on the document’s total.
Net of Discount Tax Calculation Method
If the tax regime of your current company is VAT or GST, and the account contained on an invoice or credit note uses the "Net of Discount" tax calculation method, credit terms affect the tax calculation for the following documents:
- Sales Invoices and Credit Notes: The credit terms on the customer account are used, or if these do not exist, those of the current company are used instead. The maximum available discount is deducted from the net value of the document before calculating the tax value.
- Payable Invoices and Credit Notes: The credit terms on the vendor account are used. The maximum available discount is deducted from the net value of the document before calculating the tax value.
Credit Terms Example
The following examples illustrate the behavior of the Credit Terms section on the accounts and company pages. In each case the invoice date is 10 September 2010.
| Description 1 | Standard | Base Date 1 | End of Next Month | Days Offset 1 | 0 | Discount 1 | 0.00 | 1 |
| Description 2 | Next +10 | Base Date 2 | Invoice Date | Days Offset 2 | 10 | Discount 2 | 5.00 | 2 |
| Description 3 | Next +15 | Base Date 3 | Start of Next Month | Days Offset 3 | 15 | Discount 3 | 2.00 | 3 |
| Description 4 | Next + 20 | Base Date 4 | Start of Next Month | Days Offset 4 | 20 | Discount 4 | 1.00 | 4 |
1. If the invoice is paid by 31 October 2010, no discount.
2. If the invoice is paid by 20 September 2010, the stated discount will be deducted (from the goods amount on the invoice).
3. If the invoice is paid by 15 October 2010, the stated discount will be deducted.
4. If the invoice is paid by 20 October 2010, the stated discount will be deducted.
