Payment Terms

May 16, 2013 § Leave a comment

The ways in which suppliers and their channel partners describe their payment terms can vary widely. Not only that, but the formulae used by different organisations for each of these terms is rarely exactly the same. So, here are some of the better known terms with our version of what they mean:

  • CIA – Cash In Advance
  • COD – Cash On Delivery
  • Net 15/30/60 Days – payment is due in fifteen/thirty/sixty days after the invoice date [or, at times, the delivery date]
  • 15/30/60 Days Net Monthly – payment is due fifteen/thirty/sixty days from the end of the month in which the invoice was issued
  • Net 10th/15th/30th prox [or, proximo] – payment is due ten/fifteen/thirty days from the end of the month in which the invoice was issued
  • Net Monthly Account – payment is due at the end of the month following the month in which the invoice was issued
  • 1/10 Net 30 – payment can be reduced by 1% if paid within 10 days, or paid in full in 30 days
  • 2/10 Net 30 – payment can be reduced by 2% if paid within 10 days, or paid in full in 30 days

But you should always check with your supplier as they may have a slightly different idea of what these terms mean to them.

For a really comprehensive list of payment terms, see the glossary produced by BIS [the Bank for International Settlements].

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