Example: Applying a Basic Preference

By default, payment is due upon request when an item is delivered to a customer. For example, you have defined the retail customers in the Payment Terms basic preference customer group RETAIL. Customer A, a member of RETAIL, orders red pens. The red pen is a member of the Payment Terms basic preference item group PENS, in which the payment terms for this group is set at Net 30 Days. Based on the hierarchy for this preference, the payment terms for the customer group and item group combination, Net 30 Days, overrides the customer's payment terms that you set up in Customer Master by Line of Business table (F03012).

When you enter the order for Customer A, the customer's payment terms appear on the order header, which comes from the F03012 table.

This diagram illustrates how the system applies preferences: