Split Payment Terms and Amounts Due

Split payment terms derive different amounts due in each installment of the payment schedule, depending on the setting of the Installment Option field.

If the base amount is different from the relative amount, and you set the Installment Option field to Allocate tax and freight, Receivables prorates the base amount across the relative amounts of the payment schedule based upon the ratio you define. Receivables uses the following equation to determine the original amount due for each installment:

Amount Due = Relative Amount/Base Amount * Invoice Amount

If you set the Installment Option field to Include tax and freight in first installment, the base amount and the relative amounts that you specify for the payment schedule only indicate how the original line amounts of the invoices to which you assign these payment terms are distributed across different installments.

In this case, the original freight and tax amounts are included in the first installment, in addition to the line amount allocated by the ratio of the base amount and the relative amount that you specify for the first payment. Receivables uses the following equation to determine the original amount due for the first installment:

Amount Due = (Relative Amount/Base Amount * Base Line Amount) + Base Freight Amount + Base Tax Amount