Payment Terms in Oracle Receivables assist you in determining the due date of your customer invoices. It helps in the computation of the Customer Outstanding Ageing report. Early payment discounts can be included in payment terms, and you can apply multiple discounts to each payment term line.
We can also set up split payment terms for invoice instalments with different due dates, such as when we ask customers to pay in multiple instalments for Customer Invoices with different due dates. For example, 25% of a customer’s invoice payment should be received within 30 days. The remaining 75% should arrive in 90 days.
Receivables has two payment terms set up for you:
- 30 NET: The transaction’s balance is due in 30 days.
- IMMEDIATE: The transaction’s balance is due right away (i.e. on the transaction date). This payment term can be used for chargebacks and debit memos.
Enter a number of Print Lead Days if you want transactions assigned to this payment term to be printed before the due date. This transaction will be printed x days before the due date, where x is the number of days you enter here.
Check the Credit Check box to associate a credit check with this payment term. This information is used by Oracle Order Entry to determine when an order should be placed on hold.
Uncheck the Allow Discount on Partial Payments check box if you don’t want your customers to be able to get discounts for partial payments on items associated with this payment term.
For items with this payment term, select the First Installment option. This specifies how Receivables will distribute the freight and tax charges associated with transactions that use this payment term. To include all tax and freight charges in the first instalment, select ‘Include tax and freight.’ To distribute tax and freight charges across all instalments, select ‘Allocate tax and freight.’
On the basis of the parameters listed below, we can calculate invoice discounts.
Amount of Invoice: Choose this option to calculate the discount based on the total of your invoices’ tax, freight charges, and line amounts.
Only lines are allowed: Select this option to calculate the discount amount solely based on the invoice line amounts.
Tax, Lines, and Freight Items: Select this option to calculate the discount based on the number of line items, freight, and tax on your invoices, but not freight or charges at the invoice header level.
Not Freight Items and Tax, but Lines and Tax: Select this option to calculate the discount amount based on the line items and tax amounts on your invoices, but not the freight items and tax lines.
In the ‘Seq’ field, enter a line number for the instalment term you’re defining. For each instalment term with a later due date, enter a higher number. For example, if you’re creating terms with 50% due in 15 days and 50% due in 30 days, enter ’10’ for the first line and ’20’ for the second line in this field.
Steps to define Payment Terms in Oracle Fusion
Step1: Navigator -> Setup and Maintenance
Step2: Search for ‘Manage Payment Terms’ in search bar
Step3: Fill details to create payment terms in the UI