Payment Credit Terms

Payment terms can apply to any party in the sale, from the wholesaler to the individual consumer.

Common Invoice Payment Terms

PIA - Payment in advance Net 7 - Payment seven days after invoice date Net 10 - Payment ten days after invoice date Net 30 - Payment 30 days after invoice date Net 60 - Payment 60 days after invoice date Net 90 - Payment 90 days after invoice date EOM - End of month 21 MFI - 21st of the month following invoice date 1% 10 Net 30 - 1% discount if payment received within ten days otherwise payment 30 days after invoice date COD - Cash on delivery Cash account - Account conducted on a cash basis, no credit Letter of credit - A documentary credit confirmed by a bank, often used for export Bill of exchange - A promise to pay at a later date, usually supported by a bank CND - Cash next delivery CBS - Cash before shipment CIA - Cash in advance CWO - Cash with order 1MD - Monthly credit payment of a full month's supply 2MD - Monthly credit payment of a full month's supply plus an extra calendar month Contra - Payment from the customer offset against the value of supplies purchased from the customer Stage payment - Payment of agreed amounts at stage

Discount Payment Terms

Accumulation discounts - Discounts for large purchases Coupons - These have certain terms, such as a certain quantity has to be purchased or if the customer is past a certain age Disability discount - Offer to customers with a disability Discount card - Issuing cards that give certain customers or any customer a discount Educational or student discount - Usually given to students, but may go to educators Employee discount - Offered to employees Forward dating - Moving the invoice date forward so that the payment is made after receipt of goods Military discount - Offered to members of the military and family members Partial payment discount - When a seller needs cash flow, he may offer a partial discount Preferred payment method discount - Some retailers give customers a lower price if they pay with cash. This saves the fee the retailer pays on credit cards. Prompt payment discount - The wholesaler or manufacturer gives a discount to the retailer at the list price or catalogue price. This sometimes applies to promotions. Rebates - A refund mailed to the purchaser after a purchase Sliding scale - This discount is calculated on a person’s ability to pay. This is common with non-profit organizations. Seasonal discount - Usually this is given during a slack period when sales are down. Toddler discount, child discount, or kid discount - This covers free or discounted prices for children under a certain age. There is usually a requirement that an adult pay full price. Trade discount - Payments for functions such as shelf stocking, warehousing or shipping Trade-in credit - A discount for something that is returned These examples of payment terms show the wide variety of terms that can be offered by the vendor.