Was this page helpful?
Thank you!

Comments or suggestions?



Enter Email Address (optional)
email

Set up payment terms

How do payment terms work in QuickBooks?

Payment terms indicate when you expect to receive payment from a customer or when your vendors expect payment from you. For example, if you expect payment from a customer within 30 days and you give a discount of 2% if payment is received in 10 days, the terms are 2% 10 Net 30.

QuickBooks supplies a list of often-used payment terms on the Terms list. You can easily add new terms to the list. Because QuickBooks uses terms in both accounts payable and accounts receivable, you need only add a set of terms once to the list.

To apply terms to a transaction, select the terms you want from the Terms list when you are creating an invoice or entering a bill.

To do this task

  1. Go to the Lists menu, choose Customer & Vendor Profile Lists, and then click Terms List. Shortcut

  2. Click Terms at the bottom of the list and click New.

  3. In the Terms field, enter a word or phrase that will help you recognize the terms when you use the Terms list (what you enter here appears on the list).

  4. Indicate the type of terms that you want to use.

    Standard vs. date-driven payment terms

    Standard payment terms

    Your invoices are due within 25 days of receipt, and you give your customers a 1% discount if they pay within 10 days. These are standard terms, because payment is due within a specific number of days from the invoice date.

    In the New Terms window, click Standard and enter 1% 10 Net 25.

    Date-driven payment terms

    Your invoices are due on the 25th day of the month, and you give your customers a 1% discount if they pay within 10 days.

    To let QuickBooks know that "25" means the "25th day of the month" and not "25 days after the invoice date," click Date Driven in the New Terms window and enter 1% 10 Net 25.

  5. Fill in the fields.

    Net due

    For standard terms, enter the number of days in which payments from customers or bills to vendors are due.

    For date-driven terms, enter the day of the month by which payment is due.

    Due the next month if

    Used for date-driven terms only, to handle cases in which invoices or bills are issued just prior to the due date.

    If the invoice or bill is issued within the number of days you enter, payment is not due until the following month.

    Discount
    percentage

    Enter the discount percentage a customer earns for early payment of an invoice or that your business earns for early payment of a bill. If there is a discount, also complete the next field
    ("Discount if paid").

    If there is no discount, enter zero.

    Discount
    if paid

    Enter the number of days within which a customer or your business can pay and receive a discount for early payment. Be sure to enter the discount percentage in the previous field ("Discount percentage").

  6. Record the payment terms.

    Click Next to record and enter another.

    Click OK to record but close the window.

See also

KB ID# H_PMT_TERMS
4/20/2014 6:35:41 AM
PPRDQSSWS400 9102 Pro 2013 e78e2b