.. index:: payment terms

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 :menuselection:`Accounting -->
Configuration --> Miscellaneous --> Payment Terms` and then click :guilabel:`New`.

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.

.. figure::  images/account_payment_term.png
   :scale: 75
   :align: center

   *Configuring payment terms*

To configure new conditions, start by giving a name to the :guilabel:`Payment Term` field. Text that
you put in the field :guilabel:`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 :guilabel:`Payment Term`. You
must give each line a name (:guilabel:`Line Name`). These give an informative title and do not affect
the actual calculation of terms. The :guilabel:`Sequence` field lets you define the order in which
the rules are evaluated.

The :guilabel:`Valuation` 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 :guilabel:`Value Amount`. The number indicated in :guilabel:`Value Amount` must take a value between 0 and 1.

* ``Fixed Amount`` : this is a fixed value given by the :guilabel:`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, :guilabel:`Number of Days` and :guilabel:`Day of the Month`, enable the calculation of
the delay in payment for each line. The delay :guilabel:`Day of the Month` can be set to \ ``-1`` \, \ ``0`` \
or any positive number. For example, if today is 20th December 2010, and if you want to set payment terms like this:

* :guilabel:`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 2010.
* :guilabel:`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 2010.
* :guilabel:`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 2011.

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

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