Use this function to define the payment terms that apply to transactions with customers and vendors. Enter the payment terms defined here in the master records of customers and vendors. The payment term specified here is proposed automatically when you create a master record. You can then change this data for each customer or vendor.

The payment terms represent the typical agreements you have with your business partners. Therefore, you do not have to define this information from scratch for each customer and vendor.

When a purchasing or sales document is entered for a customer or vendor, SAP Business One automatically copies the information regarding payment period, price list, and total discount into the document. This information is used to calculate the prices for the items, the due date of an invoice, or the total discount allowed etc.

You can also change the payment term data manually in the transaction itself if a special agreement was made for that transaction. In addition, the information on the credit limit is copied from the payment term to the customer master record and then to the sales document, and can be used for a credit check.