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You can use your payment terms to determine the amount of each installment. Receivables lets you either distribute tax and freight charges across all installments, or allocate all freight and tax amounts in the first installment of a split term invoice. Receivables displays the active payment terms you define as list of values choices in the Customers, Customer Profile Classes, and Transactions windows.

Receivables provides two predefined payment terms:

**30 NET:**The balance of the transaction is due within 30 days.

**IMMEDIATE:**The balance of the transaction is due immediately (i.e. on the transaction date). You can use this payment term with your chargebacks and debit memos.

- 1. Navigate to the Payment Terms window.

- 2. Enter the Name of this payment term.

- 3. Enter the Base Amount for this payment term. The default is 100, but you can change it. The base amount is the denominator for the ratio Receivables uses to determine the amount due for installments of invoices to which you assign this payment term. The sum of the relative amounts for all of the payment schedules that you define for these payment terms must be equal to the value that you specify as a base amount. See: Payment Terms Field Reference.

- 4. If this payment term uses proxima terms, enter the day to start the new billing cycle for the next month in the Cutoff Day field. Customers who have invoices that fall due before the cutoff day of the invoices' payment terms receive invoices on the day that you specify in the Due: Day of Month field for the current month. Customers who have invoices with payment terms that fall due after the terms' cutoff day receive invoices on the day that you specify in the Due: Day of Month field for the next month of each of these terms.

- 5. If you want transactions assigned to this payment term to be printed before the due date, enter a number of Print Lead Days. Receivables will print this transaction

- 6. To associate a credit check with this payment term, check the Credit Check check box. Oracle Order Entry uses this information to determine when to place an order on hold.

- In Oracle Order Entry, if the profile for an address does not have credit checking limits defined in a particular currency but the customer does, then the order passes credit check. If the address does not have limits in the currency and neither does the customer, then the order is compared to the customer limit in that currency.

- 7. If you do not want to let your customers take discounts for partial payments on items associated with this payment term, uncheck the Allow Discount on Partial Payments check box.

- 8. Enter the First Installment option for items assigned to this payment term. This indicates how Receivables will allocate the freight and tax charged to transactions using this payment term. Choose 'Include tax and freight' to include all tax and freight charges in the first installment. Choose 'Allocate tax and freight' to distribute tax and freight charges across all installments.

- 9. Enter the Discount Basis you want Receivables to use when calculating discounts for your invoices. The default is the value that you entered in the System Options window. Choose one of the following discount methods:

- 10. Enter a range of Effective Dates for this payment term. If you do not enter an end date, this payment term will be active indefinitely.

- 11. Enter a line number for the installment term that you are defining in the 'Seq' field. Enter a higher number for each installment term with a later due date. For example, if you create terms with 50% due in 15 days and 50% in 30 days, enter '1' in this field for the first line and '2' for the second line.

- 12. Enter the Relative Amount for this payment term. This is the numerator of the ratio that Receivables uses to determine the amount due for this installment of these payment terms. The sum of the relative amounts for all of the payment schedules that you define for each payment term must be equal to the base amount for this term.

- 13. Enter the number of Days after the invoice date that payment is due for this installment term (optional). For split payment terms, this number indicates the number of days after the invoice date that an installment is due.

- 14. Enter the Date on which payment is due for this installment term (optional). If you do not complete this field, enter a value for either Due Days or both Due Day of Month and Due Months Ahead.

- 15. If you are defining proxima terms, enter the Day of Month that payment is due for this installment term. For example, if payment is due on the fifteenth of each month, enter '15.'

- 16. If you are defining proxima terms and you entered a value for Day of Month, enter the Months Ahead to which this installment term of the proxima terms refer. For example, if you entered '15' for Day of Month and you enter '2' here, an invoice dated in May will have a due date of July 15.

- 17. Save your work. To assign discounts to each payment schedule line of your payment term, see: Entering Discount Information.

Defining Customer Profile Classes

Discounts do not apply to Automatic Receipts. If you use the automatic receipts feature to create your Bills of Exchange and Direct Debits, Receivables will not calculate discounts, even if your customers pay before the due date.

- Define payment terms

- 1. Navigate to the Payment Terms window.

- 2. Query or enter the payment term.

- 3. Choose Discounts.

- 4. Enter the discount percentage and number of Days for this payment term. For example, to give customers using this payment term a two percent discount if payment is received within ten days, enter '2' and '10' respectively.

- 5. To limit the period of time that the discount for this installment's discount line will be active, enter the Date, day of the Month, and the number of Months Ahead for this discount's expiration date. Receivables uses these values to calculate the discount date during invoice entry.

- 6. Save your work.

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