# Set Party wise Payment Terms
**YouTube:** [Party wise Payment Terms](https://www.youtube.com/watch?v=S5gdMgdlyHw\&t=4s)
## Party wise Payment Terms
In this tutorial, we will learn how to **create and apply Payment Terms in Logic ERP**.\
Payment terms help businesses **define clear payment conditions for customers**, including **payment deadlines, discounts for early payment, and interest charges for late payments**.
***
### Why Payment Terms Are Important
Payment terms help businesses:
* Set **clear expectations for payment timelines**
* Offer **discounts for early payments**
* Apply **interest on delayed payments**
* Improve **cash flow management**
* Maintain **transparent payment policies with customers**
***
### Open Account Setup Window
To define payment terms, first open the account setup window.
* Navigate to the **Main Menu**.
* Open the **Setup Module**.
* Click on **Setup New Accounts**.
* Select an existing customer account or create a new customer account.
* Click on **Other Details**.
* The **Other Details** window will open.
* Here you will find the option for **Payment Terms**.
***
### Define Payment Terms
In the **Payment Terms section**, you can define:
* **Number of Days**
* **Discount Percentage**
* **Interest Percentage**
You can create **multiple payment conditions based on payment timing**.
***
### Example of Payment Terms Configuration
* **Entry 1 – Early Payment Discount**
* Days: 30
* Discount: 2%
* If the customer pays within 30 days, a **2% discount** will be applied to the bill.
* **Entry 2 – Late Payment Interest**
* **Days:** 60
* **Interest:** 2%
* If the payment is made after 60 days, **2% interest** will be charged on the outstanding amount.
* **Entry 3 – Higher Late Payment Interest**
* Days: 90
* Interest: 4%
* If the payment is made after 90 days, **4% interest** will be charged.
* You can create multiple payment terms as per your business policy.
* After entering the details, **save the account configuration**.
***
### Record Payment Transaction
Now let’s see how the payment terms work during transactions.
* Enter a **Bank Receipt** for the customer account where payment terms were applied.
**Example:**
* **Bill Amount:** ₹21,239.00
* Save the receipt entry.
***
### Verify Payment Terms in Due Analyzer Report
To check whether the payment terms are applied correctly:
* Navigate to **Reports/Queries**
* Select **Financial Reports**
* Open **Dues/Ageing Analysis**
* Generate the Report for the respective customer.
**Understanding the Due Analyzer Report**
* In the report you will see
* **Discount Percentage Column**
* **Interest Column**
**Example behavior based on our defined terms:**
* If payment is received **within 30 days** → **2% discounts will appear**
* If payment is received **after the defined period** → **Interest will appear in the interest column**
This confirms that the **payment terms are applied correctly**.
***
### Conclusion
Using the **Payment Terms feature in Logic ERP**, businesses can:
* Encourage **early payments with discounts**
* Apply **interest for late payments**
* Maintain **clear payment policies**
* Improve **cash flow and financial discipline**
This feature helps make the **payment process more transparent and efficient for both businesses and customers**.
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