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You can use invoice terms to set due dates for invoices or to offer discounts for on-time payments. Term discounts are not the same as discounts, such as multiple student discounts or teacher discounts, assigned during invoice distribution.
You can set up terms in the General Ledger section of the Define Lists window. This is where you set the Invoice Terms name, discount, and discount deadline for early payment.
If you update a term Define Lists window, the change applies to all unpaid invoices that use the term.
To add terms to an invoice
- In the Add Invoice window, select the appropriate Invoice Terms in the drop-down list. The Discount Amount and Discount Date display to the right.
- To enter an amount and date unique to this invoice, click the blue text. (Once the invoice is paid and the discount applied, a check mark displays next to the discount amount.)
- The Edit Discount Values dialog box opens. Make your changes and click OK. The Invoice Terms value automatically changes to Other.
- Complete the invoice as described in Adding and Editing Invoices.
When you post a payment for an invoice with terms, the following occurs:
- For cash basis accounting: The discount account is debited for the discount. The balance credits revenue and debits cash.
- For accrual basis accounting: The discount account is debited for the discount. The balance credits receivables accrual account and debits cash.