# Payment Terms¶

You can define whatever payment terms you need in OpenERP. Payment terms determine the due dates for paying an invoice.

To define new payment terms, use the menu Accounting ‣ Configuration ‣ Miscellaneous ‣ Payment Terms and then click Create.

The figure below represents the following payment term: 5000 within 5 days, 50% payment at the last day of current month, Remaining on 15th of next month.

Configuring payment terms

To configure new conditions, start by giving a name to the Payment Term field. Text that you put in the field Description on invoices, is used on invoices, so enter a clear description of the payment terms there.

Then create individual lines for calculating the terms in the section Payment Term.

The Amount to pay field enables you to calculate the amount to pay for each line:

• Percent : the line corresponds to a percentage of the total amount, the factor being given in Value Amount. The number indicated in Value Amount must take a value between 0 and 1.
• Fixed Amount : this is a fixed value given by the Value Amount box.
• Balance : indicates the balance remaining after accounting for the other lines.

Think carefully about setting the last line of the calculation to Balance , to avoid rounding errors. The highest sequence number is evaluated last.

The two last fields, Number of Days and Day of the Month, enable the calculation of the delay in payment for each line. The delay Day of the Month can be set to -1 , 0 or any positive number. For example, if today is 20th December 2012, and if you want to set payment terms like this:

• 5000 within 5 days: set Valuation Fixed Amount, Number of Days 5 and Day of the Month 0. That creates journal entry for date 25th December 2012.
• 50% payment at the last day of current month: set Valuation Percent, Number of Days 0 and Day of the Month -1. That creates journal entry for date 31st December 2012.
• Remaining on 15th of next month: set Valuation Balance, Number of Days 0 and Day of the Month 15. That creates journal entry for date 15th January 2013.

You can then add payment terms to a Partner through the tab Accounting on the partner form.