What are invoice Payment Terms?
Invoice payment terms are contractual agreements between a buyer and a seller that outline the timeline and conditions for the payment of invoices. These terms specify the period (such as net 14, net 30) in which buyers are expected to pay their invoices and may include incentives for early payment or penalties for late payment.
Why do invoice Payment Terms matter?
By adhering to the agreed-upon payment terms, companies avoid the pitfalls of late payments, which can lead to strained relationships with suppliers. This, in turn, may result in less favourable terms in future purchases. Additionally, late payments may incur fees or penalties.
Defining default Payment terms for your suppliers
In recurring business relationships, payment terms are likely to remain constant, meaning, the same terms are usually applied from one invoice to another. By establishing default payment terms for your suppliers in Moss, you can further automate invoice due dates, ensuring suppliers are always paid consistently and on time. 💸
How to create payment terms in Moss
There are multiple ways to create a payment term. You can either choose to add them manually or import your payment terms using a CSV file.
Create payment terms manually
Go to ‘Settings’ using the left navigation bar.
Then, still in the navigation bar, go to ‘Accounting’.
Click on ‘Payment terms’.
Once on the Payment terms page, click the green ‘+Add/Import’ button.
Then, enter the number of days that will define the payment period or ‘Due date’.
Provide a brief ‘Description’.
Set the ‘Number’ as your payment term’s unique identifier.
Finally, click ‘Add payment term’.
Your new payment term is good to go 👍
Import payment terms using a CSV file
Go to ‘Settings’ using the left navigation bar.
Then, still in the navigation bar, go to ‘Accounting’.
Click on ‘Payment terms’.
Once on the Payment terms page, click the green ‘+Add/Import’ button.
Then, download the CSV template and ensure your payment terms file is correctly formatted:
Column A: Number
Column B: Description
Column C: Due date
Once your CSV file is in the correct format, upload your payment terms.
Finally, click ‘Import payment terms’ to complete the process.
Your new payment terms are good to go ✅
How to define default payment terms for your suppliers
By choosing default payment terms for your suppliers, you are able to further automate your invoice due dates. To define default payment terms for your suppliers in Moss:
Go to the ‘Settings’ tab using the left navigation bar.
Next, in the same navigation bar, go to ‘Accounting’.
Click on ‘Suppliers’.
Open the relevant supplier.
Scroll down to the ‘Payment details’ section.
Select the appropriate ‘Payment term’ agreed with your supplier.
Finally, save the changes for the supplier.
Once you have chosen a default payment term for a supplier, it will automatically apply to all invoices you receive from this supplier and be used to define the relevant due date. However, rest assured, you will be able to modify both the invoice payment terms as well as the due date, in case exceptions apply.
You are all set 👍- the selected payment terms will be applied to all future invoices of this supplier.
How are payment terms applied to incoming invoices
Whenever an invoice is created and the selected supplier has default payment terms in Moss, these terms will be used to automatically calculate the invoice due date. For example, if the invoice date is April 30, 2024, and the payment terms are 14 days, then the due date will be May 14, 2024.
If the selected supplier doesn't have default payment terms, you can manually select them in the payment details section of your invoice. After you select the appropriate payment terms, ensure you save them as default to have them applied to all future invoices from this supplier.
Note: In the absence of default payment terms from the supplier, Moss will determine the due date of your invoice based on the information extracted from the document.
