Payment Terms Configuration Odoo 18

B2B company extending credit customers discovers cash flow crisis: offering only immediate payment terms losing large enterprise clients requiring 30-60 day payment schedules competitors providing flexible terms winning business, manually tracking invoice due dates across 500 customers spreadsheets missing payment deadlines unable identifying overdue invoices quickly causing collection delays cash flow problems, startup offering early payment discounts incentivize quick payment but lacking systematic discount tracking manually calculating reduced amounts each invoice prone errors disputes, international supplier requiring complex payment schedules 25 percent deposit 50 percent shipment 25 percent delivery unable configuring multi-installment terms forcing manual invoice splitting accounting headaches, and retail distributor lacking standardized payment terms different sales reps negotiating different schedules same customer category creating inconsistency confusion customer dissatisfaction—creating revenue delays administrative burden customer churn competitive disadvantage and inability managing payment schedules systematically requiring payment term configuration installment automation early payment discounts and integrated invoice due date tracking supporting cash flow management customer satisfaction operational excellence.

Odoo 18 payment term configuration enables systematic payment management through Payment Terms defining payment schedules conditions customer supplier transactions determining when how payments due, automatic due date calculation computing payment deadlines based configured terms reducing manual errors improving efficiency, installment support enabling multiple payment installments single invoice facilitating large transaction management, early payment discounts incentivizing prompt payment offering percentage discounts customers paying before specified due date improving cash flow, customer-specific assignment setting default payment terms individual customers automatically applying terms all invoices quotations, invoice integration automatically inheriting payment terms from customers quotations ensuring consistency reducing data entry, installment date display showing scheduled payment dates invoice providing transparency customer communication, partial payment tracking monitoring installment completion payment progress maintaining accurate receivables, discount accounting automatically posting early payment discounts gain loss accounts maintaining accurate financial records, and payment progress notifications alerting about pending installments preventing duplicate payments ensuring collection completeness—reducing late payments 70 percent through clear terms automatic reminders improving cash flow via early payment incentives shortening collection cycles systematic tracking enhancing customer relationships via flexible payment options and achieving financial excellence accurate receivables management systematic payment terms supporting business growth financial stability.

Understanding Payment Terms

Defining payment schedules conditions:

Purpose and Benefits:

Common Payment Term Examples:

Creating Payment Terms

Configuring payment schedules:

Accessing Payment Terms:

1. Navigate to Accounting:
   • Go to: Accounting module
   • Accounting dashboard displays
2. Access Configuration:
   • Menu: Configuration → Payment Terms
   • Payment terms list displays
3. View Existing Terms:
   • All previously created payment terms listed

Creating New Payment Term:

1. Click New:
   • New payment term form opens
2. Fill Basic Information:
   • Payment Term: Name identifying term (e.g., "Net 30 Days")
   • Company: Company these terms apply (multi-company setups)
3. Configure Due Terms:
   • Section: Due Terms
   • Click Add a line
   • Define installment:
     • Value: Percentage or fixed amount
     • Value Type: Percent Balance Fixed Amount
     • Number of Days: Days after invoice date
     • Day of Month: Specific day month (optional)
     • Months: Number months offset
   • Multiple lines installment payments

Due Term Configuration Examples:

Display Options:

• Show Installment Dates: Checkbox enable displaying installment due dates invoice
• When enabled customers see specific dates each payment
• Improves transparency payment expectations

Save Payment Term:

1. Review configuration
2. Click Save
3. Payment term created available use

Early Payment Discounts

Incentivizing prompt payment:

Configuring Early Discounts:

1. Create/Edit Payment Term:
   • Open payment term form
2. Enable Early Discount:
   • Checkbox: Early Discount
   • Check box enable feature
   • Discount configuration fields appear
3. Configure Discount Rules:
   • Discount Percentage: E.g. 2% or 10%
   • Days: Time window for discount (e.g., 10 days)
4. Note:
   • Early discounts only apply single-line due terms
   • Cannot combine installments early discounts

How Early Discounts Work:

Early Discount Accounting:

Assigning Payment Terms to Customers

Setting default customer terms:

Customer Configuration:

1. Navigate to Customers:
   • Go to: Contacts or Sales → Customers
   • Select customer
2. Open Customer Form:
   • Customer details display
3. Access Sales & Purchase Tab:
   • Tab contains payment configuration
4. Set Payment Term:
   • Field: Payment Terms
   • Select appropriate term from dropdown
   • All configured payment terms listed
5. Save Customer:
   • Click Save
   • Default payment term assigned

Automatic Application:

• All new invoices quotations customer automatically inherit payment term
• Reduces manual data entry
• Ensures consistency billing
• Can override individual invoices if needed

Using Payment Terms on Invoices

Automatic term application invoicing:

Creating Invoice with Payment Terms:

1. Create Customer Invoice:
   • Navigate: Accounting → Customers → Invoices
   • Click New
2. Select Customer:
   • Choose customer field
   • Payment term automatically populated from customer default
3. Add Invoice Lines:
   • Add products services
   • Invoice total calculated
4. Review Payment Term:
   • Field: Payment Terms visible invoice
   • Due dates calculated automatically
   • Can override if needed different terms
5. Confirm Invoice:
   • Click Confirm
   • Invoice finalized
   • Due dates set based payment term

Due Date Display:

• Invoice displays calculated due date
• Installment invoices show multiple due dates
• Invoice list view shows primary due date
• Helps prioritize collections

Processing Installment Payments

Managing multi-payment invoices:

Installment Payment Workflow:

1. Invoice with Installments:
   • Example: $1,000 invoice
   • Terms: 25% deposit 75% 30 days
2. First Payment (Deposit):
   • Open invoice
   • Click Register Payment
   • System shows first installment: $250
   • Payment popup displays installment amount
   • Memo indicates: "Installment 1/2"
3. Payment Options:
   • Installment Button: Pay scheduled installment amount
   • Full Amount Button: Pay entire remaining balance
4. Complete First Payment:
   • Click Create Payment
   • Invoice status: Partially Paid
5. Second Payment:
   • Click Register Payment again
   • System shows second installment: $750
   • Notification: "Payments in progress check them"
   • Prevents duplicate payments
   • Complete second payment
6. Payment Completion:
   • All installments paid
   • Invoice status: Paid or In Payment
   • Amount Due: $0

Viewing Payment Progress:

• Invoice displays amount due bottom
• Smart button: Payments shows all installments
• Click view detailed payment history
• Track which installments completed pending

Best Practices

Standardize Payment Terms by Customer Category Ensuring Consistency: Ad-hoc payment terms each customer equals confusion inconsistency administrative burden collection difficulties. Standardization strategy: Define standard terms different customer categories (retail wholesaler enterprise), assign appropriate term based customer size creditworthiness industry, document payment term policy sharing sales team, require approval exceptions standard terms, review terms periodically adjusting market conditions cash flow needs. Standardized terms simplify operations ensure fairness enable better cash flow forecasting supporting financial stability.

Use Early Payment Discounts Strategically When Cash Flow Critical: Indiscriminate early discounts equals unnecessary revenue reduction without cash flow benefit. Strategic discount use: Calculate cost discount versus benefit early cash, offer discounts only when immediate cash needed (e.g., payroll upcoming large expense), set realistic discount windows (e.g., 10 days not 2 days), monitor uptake adjusting discount percentage effectiveness, track discount costs ensuring not exceeding cash flow benefit. Strategic discounting improves cash flow when needed without sacrificing too much revenue supporting financial health.

Clearly Communicate Payment Terms Customers Before Invoice Sent: Surprise payment terms invoice equals customer confusion disputes delayed payments. Communication best practices: Include payment terms quotations proposals before order confirmation, mention terms order confirmations customer receives, display prominently invoices bolding highlighting, send payment reminders before due dates referencing agreed terms, provide payment term details customer onboarding documentation. Clear communication sets expectations prevents disputes ensures customers prepared make timely payments supporting smooth receivables management.

Monitor Due Dates Regularly Following Up Overdue Invoices Promptly: Ignoring due dates equals late payments cash flow problems write-offs. Monitoring workflow: Daily check invoice aging report identifying approaching overdue invoices, send automated reminders days before due date, follow up personally day after due date understanding delay, escalate collections process based overdue duration client response, document all collection efforts maintaining records. Proactive monitoring follow-up dramatically improve collection rates reduce days sales outstanding maintaining healthy cash flow.

Conclusion

Odoo 18 payment term configuration enables systematic payment management through schedule definition automatic due dates multi-installment support early payment discounts customer defaults invoice integration progress tracking discount accounting payment notifications and flexible configurations. Reduce late payments through clear terms automatic reminders improving cash flow via early payment incentives shortening collection cycles systematic tracking enhancing customer relationships via flexible options achieving financial excellence accurate receivables and achieving competitive advantage professional payment management systematic collections supporting business growth financial stability operational success.