How Payment Term Works in iDempiere
In iDempiere, a Payment Term defines how and when an invoice becomes due by applying a set of date calculation rules. These rules determine the invoice due date, eligibility for early payment discounts, and whether the calculation is based on the invoice date or the delivery date. The Payment Term does not create payments by itself; instead, it controls how due dates and discount dates are automatically calculated when an invoice is completed.
How to Create a Payment Term in iDempiere
1. Navigate to the Payment Term Window
2. Enter Basic Payment Term Details
Provide the mandatory and descriptive information
- Enter a Name to identify the payment term
- Add a Description if needed for clarity
- Mark the record as Active
- Select Default if this payment term should be automatically applied
- Choose Payment Term Usage (Sales, Purchases, or Both)
3. Define Due Date Behavior
Specify how the invoice due date should be calculated
- Enter Net Days to define how many days after invoicing (or delivery) the payment is due
- Enable After Delivery if the due date should be calculated from the delivery date instead of the invoice date
- Enable Next Business Day if due dates should skip non-working days
4. Configure Early Payment Discounts
If early payment discounts apply
- Enter Discount Days and Discount % for the first discount period
- Enter Discount Days 2 and Discount 2 % for an additional discount period
- Define Grace Days if late payments are allowed without penalty
5. Configure Fixed Due Date
If payments are due on a specific day of the month
- Enable Fixed Due Date
- Enter Fix Month Day to define the day of the month invoices are due
- Enter Fix Month Cutoff to define the last invoice date eligible for the current due date
- Enter Fix Month Offset to move the due date to the same or next month
6. Add Payment Schedule
If the invoice amount must be split into multiple payments
- Go to the Schedule tab and create new schedule lines
- Define the Percentage of the total amount for each installment
- Enter Net Days for each installment
- Define Discount Days and Discount % if discounts apply per installment
How the due date is calculated
When an invoice is completed, iDempiere reads the assigned Payment Term and calculates the due date using either the invoice date or the delivery date, depending on the configuration. If the After Delivery option is enabled, the due date is calculated from the delivery date; otherwise, it is calculated from the invoice date. The Net Days value defines how many days are added to the base date to determine when the full invoice amount is due.
If the Next Business Day option is enabled, and the calculated due date falls on a non-working day, iDempiere automatically shifts the due date to the next business day. This ensures that payment deadlines align with operational working calendars.
How fixed due dates work
When the Fixed Due Date option is enabled, the due date is no longer calculated purely by adding net days. Instead, iDempiere uses the configured fixed day of the month. The Fix Month Day defines the specific day invoices are due, the Fix Month Cutoff determines which invoice dates are included for the current cycle, and the Fix Month Offset controls whether the due date falls in the same month or a future month. This setup is commonly used when organizations follow a fixed monthly payment cycle.
By using Payment Terms with clear date, discount, and scheduling rules, iDempiere ensures consistent and automated calculation of invoice due dates. This reduces manual intervention, avoids payment disputes, and enforces standardized payment policies across sales and purchasing transactions.