Payment Terms
Quick answer
The agreed conditions on when and how the customer pays: on delivery, net 30/60/90 days, with early-payment discounts.
Key takeaways
- Due date (net 30/60/90)
- Advance or payment on delivery
- Early-payment discount
- Credit limit per customer
What payment terms are
Payment terms define the due date and payment conditions in a B2B transaction: payment on delivery, net 30/60/90 days, advance, or early-payment discount (e.g. 2/10 net 30).
Why it matters to the board
Payment terms directly affect DSO and cash flow. Overly generous terms lock cash; overly strict ones can lose customers. The balance is a strategic decision.
Common elements
- Due date (net 30/60/90)
- Advance or payment on delivery
- Early-payment discount
- Credit limit per customer
How CRMconnect helps
CRMconnect applies payment terms and the credit limit per customer in the B2B portal and at order capture, blocking or flagging orders that exceed credit, before they become overdue receivables.
Real-world example
A distributor accepted orders exceeding the customer's credit limit, creating overdue receivables. With automatic checks in CRMconnect, risky orders are flagged before processing.
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Frequently asked
What does 2/10 net 30 mean?+
A 2% discount if you pay within 10 days; otherwise the full amount at 30 days. A classic early-payment incentive.
How do I link payment terms to risk?+
Through the credit limit per customer and balance checks on every order - exactly what CRMconnect automates in the B2B flow.
Where CRMconnect fits
Related terms
Credit limit & balance
Commercial exposure control: the portal checks the customer's credit limit and balance before accepting the order.
FinanceDSO (Days Sales Outstanding)
Average number of days from invoice issue to cash collection. Key cash-flow indicator.
FinanceVAT on collection (cash accounting)
Optional Romanian scheme where VAT becomes chargeable when the invoice is collected, not when it is issued.
FinanceProforma invoice
Preliminary commercial document with no fiscal value, used for quoting and advance payment before issuing the fiscal invoice.