Set Party wise Payment Terms

YouTube: Party wise Payment Terms

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.

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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

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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.

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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.

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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.

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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.

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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.

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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.