Introduction Payment terms in ProdSys allow businesses to manage the financial agreements between buyers and sellers regarding when payments are due for orders. These terms define how many days a customer has to make the payment for goods or services after the invoice date. Payment terms are an essential part of order management, ensuring that both parties are clear on the expectations for payments.
Purpose of Payment Terms The primary purpose of setting payment terms is to establish clear expectations regarding payment deadlines. This helps businesses manage cash flow and ensures timely payments, reducing financial risk and improving operational efficiency.
Accessing Payment Terms in ProdSys To view or configure payment terms in ProdSys, follow these steps:
Login: Start by logging into your ProdSys account using your credentials.
Navigate to Payment Terms: From the main menu, go to System > Settings > Payment Terms. Here, you will find a list of all existing payment terms as shown in the image.
https://app.prodsys.com/#/settings/payment-terms
Key Features of the Payment Terms Page
Condition: This column lists the name or description of the payment condition, such as "Netto Pr 30 dg" (Net 30 days) or "Prepayment 100%."
Days: The number of days the customer has to complete the payment. For example, if the payment term is "Pr 30 dg," the customer has 30 days to pay after the invoice date. The Payment date will be Invoice date + Days on the Invoice.
External Code: This is a code used to link payment terms to external systems, such as accounting software. It ensures smooth integration for financial reporting and invoicing.
Default: This checkbox allows you to set a default payment term that will be automatically applied to new orders if no specific term is selected.
Creating or Modifying Payment Terms
Adding New Payment Terms: Click on the blue "+" button at the top-left to add a new payment term. Fill in the required fields, such as the condition (description), number of days, external code, and whether it should be set as the default term.
Editing Existing Terms: To modify an existing payment term, click on the three dots beside the term you wish to edit. This opens an action menu where you can update the number of days, external code, or mark a different term as default.
Types of Payment Terms In ProdSys, common types of payment terms include:
Netto Pr 30 dg: This is one of the most common payment terms where the customer has 30 days to make the payment after receiving the invoice.
Prepayment 100%: Requires full payment before the goods or services are delivered.
Cash (Kontant): Payment is made immediately upon delivery of the goods or services.
Extended Terms: For example, "Netto pr. 60 days" allows 60 days to pay, providing more flexibility for the customer.
Custom Terms: Businesses can also create customized terms, such as "Netto Pr 10 days" or "Free 1 mnd. + 120 days" based on their unique financial agreements with customers.
Best Practices for Setting Payment Terms
Align Payment Terms with Business Goals: If your business needs to improve cash flow, consider offering shorter payment terms, such as "Net Pr 14 days" (Net 14 days). For trusted long-term clients, you can offer more flexible options, such as 45 or 60-day terms.
Set Default Payment Terms: Use the "Default" checkbox to automatically apply your most common payment term to all new orders. This saves time and ensures consistency in order management.
Consider Industry Standards: Depending on your industry, certain payment terms may be more common. Align your terms with industry standards to meet customer expectations.
Conclusion The Payment Terms feature in ProdSys simplifies the management of financial agreements between businesses and their customers. By setting clear payment conditions, businesses can improve their cash flow, reduce the risk of late payments, and maintain a smooth operational process. Make sure to regularly review and update your payment terms to ensure they align with your business objectives and customer relationships.