In the Payment Terms window, you define payment terms that you can assign to an invoice to automatically create scheduled payments when you submit Payables Invoice Validation for the invoice. You can define payment terms to create multiple scheduled payment lines and multiple levels of discounts. You can create an unlimited number of payment terms.
Payment terms have one or more payment terms lines, each of which creates one scheduled payment. Each payment terms line and each corresponding scheduled payment has a due date or a discount date based on one of the following:
i) a specific day of a month, such as the 15th of the month
ii) a specific date, for example, March 15, 2002.
iii) a number of days added to your terms date, such as 14 days after the terms date
iv) a special calendar that specifies a due date for the period that includes the invoice terms date. Only due dates can be based on a special calendar. Discount dates cannot be based on a special calendar.
Each payment terms line also defines the due or discount amount on a scheduled payment. When you define payment terms you specify payment amounts either by percentages or by fixed amounts.
After you define your payment terms, in the Payables Options window you can select default payment terms that Payables automatically assigns to the suppliers and supplier sites you enter.
The payment terms for a supplier site default to the invoices you enter for the site except in the following circumstances:
i) You enter a PO Default or QuickMatch invoice in the Invoice Workbench, in which case the terms default from the purchase order.
ii) You import an invoice record that has payment terms specified on the record, or the import process can derive terms from purchase order matching.
You can override the default payment terms on any invoice.
Attention: If you update the payment terms on an invoice, Payables immediately recalculates the scheduled payment for the invoice. Thus, you must re-enter any manual adjustments you made to the previous scheduled payment. For example, if you update the payment priority on a particular scheduled payment and then change the payment terms, Payables will immediately recalculate the scheduled payment using the same payment priority defaults as before and you will need to update the payment priority again.
If you use Multiple Language Support (MLS), you can define payment terms in each of your installed languages. Select Translations from the toolbar or menu to enter the payment term name and description in other languages. When a user selects payment terms from a list of values, the payment terms on the list will appear in the user's language. For more information, see: the Oracle Applications User Guide.
Prerequisite:
i) If you are defining calendar-based payment terms, define one or more payment terms type special calendars.
To define payment terms:
1. In the Payment Terms window, enter a unique payment term name and a description. These will appear on a list of values whenever you select payment terms.
For detailed information on any field.
2. If you are entering Day of Month terms, enter a Cutoff Day.
3. If you enable Automatic Interest, enter a unique value in the Rank field.
4. If you want to make this payment term invalid on and after a certain date, enter that date in the [Effective Dates] To field.
5. Enter each payment terms line.
Enter one of the following to determine the portion of an invoice due on the scheduled payment:
% Due
Amount
In the Due tabbed region, enter one of the following to determine the due date on the scheduled payment line:
Calendar
Fixed Date
Days
Day of Month, and Months Ahead
6. If you are using discount terms, define payment terms lines in the First, Second, and Third Discount tabbed regions. Define your discounts so that the first discount has an earlier discount date than the second and so on. You can realize only one discount on a payment terms line.
Note: You cannot use a special calendar to define discount terms.
Enter one of the following to determine the portion of the invoice to discount on the scheduled payment:
% Discount
Amount
In the Discount region, enter the discount percent.
Enter one of the following to determine the due date on the scheduled payment line:
Due Days
Day of Month, and Months Ahead
7. Save your work.
Payment Terms Window Reference
Name. Payment term name. Use names that make it easy to identify the usage of payment terms. For example, use 1/10 Net 30 to refer to a payment term which indicates you get a 1% discount if you pay within 10 days and the invoice is due in 30 days. This name will appear on a list of values with the description whenever you select a payment term.
Description. Description of payment term.
Cutoff Day. For Day of Month type terms only, the day of month after which the due and discount dates of the scheduled payment will be in a future month. The exact month depends on the value you enter for Months Ahead. Payables compares the invoice terms date to the Cutoff Day. If you leave this field blank, Payables always uses the current accounting month to determine the due and discount dates. For example, your Cutoff Day is 11, your Months ahead is zero, and your Day Of Month due date is 15. If you enter an invoice with a terms date of January 12, Payables will set the due date for February 15.
If you use Due Days or Fixed Date type terms, do not enter a cutoff day.
Rank. If you enable Recalculate Scheduled Payment, enter a unique value to rank your invoice terms. 1 is the highest rank. Payables uses ranks to choose the most favorable payment terms from the invoice and purchase order. During Payables Invoice Validation, Payables recalculates the scheduled payment using the most favorable terms only if the Recalculate Scheduled Payment Payables option is enabled.
% Due. The portion of an invoice due. The total of your scheduled payment lines must equal 100%. You cannot combine percentages due and amounts due for one set of payment terms.
Amount. For amount due terms only, enter the amount due. Typically amount due terms have more than one payment terms line since you must specify zero as the amount on your last payment terms line. Payables uses the zero amount payment line to determine the remaining amount due on the last scheduled payment.
Due or Discount Date Region
Calendar. If you enter a value in the Calendar field, Payables determines due dates for scheduled payments by using a special calendar. A special calendar is divided into periods, and each period has a due date assigned to it. When you assign due dates to the periods of a payment terms calendar, you can avoid weekends, holidays, and so on. You can define special calendars for payment terms in the Special Calendar window.
Note: If you use calendar-based terms, be sure to use calendars with periods defined for any invoice terms date that you will use. You cannot assign calendar-based terms in the Invoices window if there is not a period defined for the terms date. If you do so in the Invoice Gateway, then the system will use the terms date as the due date. If you do so for an expense report, you cannot import it.
Fixed Date. Specific month, day, and year on which payment terms are due.
% Discount. Payables uses the percentage you enter here to calculate the discount amount available for a scheduled payment. Payables multiplies this percentage with the amount due on the scheduled payment line to determine the discount amount available on the scheduled payment line. In the Second and Third Discount regions, you can enter second and third discount percentages for discounts available if you miss the first discount date. Do not enter a value in this field if there is no discount available.
Days. Payables adds this number of days to the invoice terms date to determine the due or discount date on your scheduled payment line. You cannot enter values in the Day of Month and Months Ahead fields for a payment terms line if you enter a value in this field.
Day of Month/Months Ahead.
Day of Month. Payables uses the value you enter here to calculate a due or discount date for a scheduled payment. For example, enter 15 to have Payables schedule payment for the 15th day of the month. Enter 31 if you want to have Payables schedule payment for the final day of the month, including months with less than 31 days.
Months Ahead. For Day of Month type terms only. Payables uses the value you enter here in conjunction with the Cutoff Day you enter to calculate the due or discount date of a scheduled payment line. If you enter zero in this field and the terms date of an invoice is the same as or later than the Cutoff Day, then Payables uses the day in the Day of Month field for the next month as the due date of an invoice payment line. If you enter 1 in this field, Payables uses one month beyond the next month as the due date.
You cannot enter a value in this field if you enter a value in the Due Days field.
Payment terms have one or more payment terms lines, each of which creates one scheduled payment. Each payment terms line and each corresponding scheduled payment has a due date or a discount date based on one of the following:
i) a specific day of a month, such as the 15th of the month
ii) a specific date, for example, March 15, 2002.
iii) a number of days added to your terms date, such as 14 days after the terms date
iv) a special calendar that specifies a due date for the period that includes the invoice terms date. Only due dates can be based on a special calendar. Discount dates cannot be based on a special calendar.
Each payment terms line also defines the due or discount amount on a scheduled payment. When you define payment terms you specify payment amounts either by percentages or by fixed amounts.
After you define your payment terms, in the Payables Options window you can select default payment terms that Payables automatically assigns to the suppliers and supplier sites you enter.
The payment terms for a supplier site default to the invoices you enter for the site except in the following circumstances:
i) You enter a PO Default or QuickMatch invoice in the Invoice Workbench, in which case the terms default from the purchase order.
ii) You import an invoice record that has payment terms specified on the record, or the import process can derive terms from purchase order matching.
You can override the default payment terms on any invoice.
Attention: If you update the payment terms on an invoice, Payables immediately recalculates the scheduled payment for the invoice. Thus, you must re-enter any manual adjustments you made to the previous scheduled payment. For example, if you update the payment priority on a particular scheduled payment and then change the payment terms, Payables will immediately recalculate the scheduled payment using the same payment priority defaults as before and you will need to update the payment priority again.
If you use Multiple Language Support (MLS), you can define payment terms in each of your installed languages. Select Translations from the toolbar or menu to enter the payment term name and description in other languages. When a user selects payment terms from a list of values, the payment terms on the list will appear in the user's language. For more information, see: the Oracle Applications User Guide.
Prerequisite:
i) If you are defining calendar-based payment terms, define one or more payment terms type special calendars.
To define payment terms:
1. In the Payment Terms window, enter a unique payment term name and a description. These will appear on a list of values whenever you select payment terms.
For detailed information on any field.
2. If you are entering Day of Month terms, enter a Cutoff Day.
3. If you enable Automatic Interest, enter a unique value in the Rank field.
4. If you want to make this payment term invalid on and after a certain date, enter that date in the [Effective Dates] To field.
5. Enter each payment terms line.
Enter one of the following to determine the portion of an invoice due on the scheduled payment:
% Due
Amount
In the Due tabbed region, enter one of the following to determine the due date on the scheduled payment line:
Calendar
Fixed Date
Days
Day of Month, and Months Ahead
6. If you are using discount terms, define payment terms lines in the First, Second, and Third Discount tabbed regions. Define your discounts so that the first discount has an earlier discount date than the second and so on. You can realize only one discount on a payment terms line.
Note: You cannot use a special calendar to define discount terms.
Enter one of the following to determine the portion of the invoice to discount on the scheduled payment:
% Discount
Amount
In the Discount region, enter the discount percent.
Enter one of the following to determine the due date on the scheduled payment line:
Due Days
Day of Month, and Months Ahead
7. Save your work.
Payment Terms Window Reference
Name. Payment term name. Use names that make it easy to identify the usage of payment terms. For example, use 1/10 Net 30 to refer to a payment term which indicates you get a 1% discount if you pay within 10 days and the invoice is due in 30 days. This name will appear on a list of values with the description whenever you select a payment term.
Description. Description of payment term.
Cutoff Day. For Day of Month type terms only, the day of month after which the due and discount dates of the scheduled payment will be in a future month. The exact month depends on the value you enter for Months Ahead. Payables compares the invoice terms date to the Cutoff Day. If you leave this field blank, Payables always uses the current accounting month to determine the due and discount dates. For example, your Cutoff Day is 11, your Months ahead is zero, and your Day Of Month due date is 15. If you enter an invoice with a terms date of January 12, Payables will set the due date for February 15.
If you use Due Days or Fixed Date type terms, do not enter a cutoff day.
Rank. If you enable Recalculate Scheduled Payment, enter a unique value to rank your invoice terms. 1 is the highest rank. Payables uses ranks to choose the most favorable payment terms from the invoice and purchase order. During Payables Invoice Validation, Payables recalculates the scheduled payment using the most favorable terms only if the Recalculate Scheduled Payment Payables option is enabled.
% Due. The portion of an invoice due. The total of your scheduled payment lines must equal 100%. You cannot combine percentages due and amounts due for one set of payment terms.
Amount. For amount due terms only, enter the amount due. Typically amount due terms have more than one payment terms line since you must specify zero as the amount on your last payment terms line. Payables uses the zero amount payment line to determine the remaining amount due on the last scheduled payment.
Due or Discount Date Region
Calendar. If you enter a value in the Calendar field, Payables determines due dates for scheduled payments by using a special calendar. A special calendar is divided into periods, and each period has a due date assigned to it. When you assign due dates to the periods of a payment terms calendar, you can avoid weekends, holidays, and so on. You can define special calendars for payment terms in the Special Calendar window.
Note: If you use calendar-based terms, be sure to use calendars with periods defined for any invoice terms date that you will use. You cannot assign calendar-based terms in the Invoices window if there is not a period defined for the terms date. If you do so in the Invoice Gateway, then the system will use the terms date as the due date. If you do so for an expense report, you cannot import it.
Fixed Date. Specific month, day, and year on which payment terms are due.
% Discount. Payables uses the percentage you enter here to calculate the discount amount available for a scheduled payment. Payables multiplies this percentage with the amount due on the scheduled payment line to determine the discount amount available on the scheduled payment line. In the Second and Third Discount regions, you can enter second and third discount percentages for discounts available if you miss the first discount date. Do not enter a value in this field if there is no discount available.
Days. Payables adds this number of days to the invoice terms date to determine the due or discount date on your scheduled payment line. You cannot enter values in the Day of Month and Months Ahead fields for a payment terms line if you enter a value in this field.
Day of Month/Months Ahead.
Day of Month. Payables uses the value you enter here to calculate a due or discount date for a scheduled payment. For example, enter 15 to have Payables schedule payment for the 15th day of the month. Enter 31 if you want to have Payables schedule payment for the final day of the month, including months with less than 31 days.
Months Ahead. For Day of Month type terms only. Payables uses the value you enter here in conjunction with the Cutoff Day you enter to calculate the due or discount date of a scheduled payment line. If you enter zero in this field and the terms date of an invoice is the same as or later than the Cutoff Day, then Payables uses the day in the Day of Month field for the next month as the due date of an invoice payment line. If you enter 1 in this field, Payables uses one month beyond the next month as the due date.
You cannot enter a value in this field if you enter a value in the Due Days field.
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