The terms of payment are specified together by suppliers and customers. Partially these are embodied also in the general trading conditions of the supplier. In the terms of payment is specified, when an invoice amount is due for payment (date of payment) and whether it is permitted the customer to take possible discount payments off.

Dates of payment

Usually dates of payment are so fixed that it is most meaningful for the customer to settle the payment on the last day of the discount payment period after departure of the discount payments. If the customer is at this time not solvent, it can still the discount payment reference span in such a way specified (= date of payment - discount payment period) use and must no credit with the bank for the payment of the calculation take up.

Advantages for the customer

1. The customer has time to control the commodity and the calculation.
2. The customer remains solvent in the context of the time fixed for payment (liquid).
3. Through the adherence to the discount payment period the customer saves much money, which commitment reduced depending upon a goal more or less.

Disadvantages for the customer

1. By the recourse to of the dates of payment the customer becomes dependent on its suppliers, because the credit granted by suppliers in goods form is granted.

Advantages for the supplier

1. By the grant of discount payments the supplier receives his demands rather and improves the own liquidity.
2. The receipt of payment is rather foreseeable and flatable.
3. Grant of discount payments and dates of payment are along-considered with offer comparisons.

Disadvantages for the supplier

1. The payment moral of some customers is bad.

Examples of terms of payment

• 10 days - 3%, 30 days net (up to ten days the customer can take from 3% discount payment off, otherwise the payment is due after 30 days without departure)
• 8 days - 2%, 20 days net
• immediately - 2%, 14 days net

See also

Credit granted by suppliers

Discount payment

Literature

• Lauer, Hermann: Condition management, terms of payment arrange optimal and intersperse, Duesseldorf 1998, ISBN 3-87881-124-1

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