Nov 27

Invoicing and payment terms

Commonly used invoice payment terms and their meanings

This list explains many of the terms commonly used on invoices.

Invoice payment terms

Net 7 Payment seven days after invoice date
Net 10 Payment ten days after invoice date
Net 30 Payment 30 days after invoice date
Net 60 Payment 60 days after invoice date
Net 90 Payment 90 days after invoice date
EOM End of month
21 MFI 21st of the month following invoice date
1 % 10 Net 30 1 per cent discount if payment received within ten days otherwise payment 30 days after invoice date
COD Cash on delivery
Cash account Account conducted on a cash basis, no credit
Letter of credit A documentary credit confirmed by a bank, often used for export
Bill of exchange A promise to pay at a later date, usually supported by a bank
CND Cash next delivery
CBS Cash before shipment
CIA Cash in advance
CWO Cash with order
1MD Monthly credit payment of a full month’s supply
2MD As above plus an extra calendar month
Contra Payment from the customer offset against the value of supplies purchased from the customer
Stage payment Payment of agreed amounts at stages

Many of them are working out-of-the-box in our Goodwill ERP. However in implementations we sometimes find a very unusual requirement. Like in one case, in Karawang, they sellĀ  motorcycles with payment term “after harvesting” (what?) which means the customer will pay you after the next harvest season. Only in Indonesia, grrr…. :D

Anyway, if you need a special treatment for your business case, let us know. We can help you.

Nov 11

Payment Term with Fixed Payment Schedule date

How often you wish you could do something to tweak your ERP ? The blessing to use an open source ERP is you have access to its source codes. Isn’t it great if you could just make a lil bit change so you can get exactly what you want, and not to depend on what your software dictates you.

During one implementation in a car dealer, we were facing with one requirement to support installment sales. We thought it should be easy as we knew Adempiere has already payment schedule feature. Just open up Payment Term window and create a new payment term with Fixed Due Date being checked.

1-year-installment

1-year-installment

And then we entered all the schedules with equally divided percentages, for example if it is a one-year installment than the percentage is 100/12, which 8.3333. The net days is how Adempiere will determine the due date of each schedule, which in this case is the accumulation of 30 days that end up to 360 days (supposedly equal to one year length).

Payment Schedule

Payment Schedule

However, the Fixed Due Date option didn’t give what we expected. The Due date is falling on different date each month! And the worst is in one occasion, two schedules can due on the same month (see month of July in the picture below).

Order Schedule before tweak

Order Schedule before tweak

How it happens ? Because every month has a different length in days, you can’t just accumulate the net days with an exact 30-day length. That explains how we end up with 360 days a year, and not 365 days as in actual.

Luckily we are using open source ERP. There is nothing can stop us. The show must go on. So what we did it back in the day is to bring a new option called Fixed Payment Schedule date. This option will complement the existing Fixed Due date feature.

1-year-installment_fixed

1-year-installment_fixed

The following is how the schedule is generated using this new option. It exactly gives what our client wants that for each month of the installment period, the Due date will certainly fall into the same date. And that shows the power of open source ERP!

Order Schedule after fixed

Order Schedule after fixed

If you think this feature is worthy enough to be included in the next release of Adempiere or Idempiere, let us know. We will also be grateful to have your feedback. Until next time!

Goodwill Consulting is a long time Adempiere / Idempiere supporter since their inception. We are offering software-as-a-service solution on the cloud based on Adempiere / Idempiere. For more information, you can drop us a visit at www.goodwillerp.com