Create payment termsLast updated on 01/26/2023
You can use Payment Terms to manage the due dates of sales invoices and vendor bills. Tracking the due dates of sales invoices helps you manage payment collection and disbursement accurately. Depending on your business practice, you can create separate terms for Accounts Receivable (AR) or Accounts Payable (AP). A new payment term is a Due Upon Receipt payment term, by default, and it is automatically applied to all customers and vendors, invoices, and bills. You can also set terms and due dates on your invoices to ensure your customers are aware of any past-due items. For example, you may want your invoices to say Payment due upon receipt as a friendly reminder to your customers.
Things to know
If you have an integrated accounting solution (for example, QuickBooks or Intacct), make sure that the names of terms used in ServiceTitan match the names used in your accounting software.
You need to set up the payment terms for the customers and vendors, but the individual invoice can be updated manually.
Create payment term and set global default payment term
Go to the navigation bar and click Settings
.In the side panel, click Invoicing > Payment Terms.
Click Create Payment Term.
The Create a Payment Term page opens.
In the Term Preferences tab, enter the Name of the term. Note: The name of the term is visible to customers on invoices and emails.
Select a payment due date:
Due upon receipt: Payment due date is the same as the invoice or bill date.
Due in fixed number of days: Payment due date is a certain number of days from the invoice or bill date. For example, your invoice is due within 30 days of the invoice date.
Due by certain day of the month: Payment due date is a set date of the same month of the invoice or bill date. For example, your invoice is dated 1/10/2023, and the term due date is set for the 25th of each month. So the term sets the due date as 1/25/2023 because the due date for an invoice is set on the 25th of each month as it is the 25th day of the month of the invoice (January).
Due by certain day of the following month: Payment due date is going to be a set date of the month following the invoice date. For example, your invoice date is 1/10/2023 and the term due date is set on the 5th day of the following month. So this sets the due date as 2/5/2023, as it is the 5th day of the month after the invoice date month (January).
Note: If you select Due by certain day of the month or Due by certain day of the following month and enter a date exceeding the number of days available in the month, the last day of the month is chosen. For example, if you select Due by certain day of the month and enter 31, in the month of June, the due date will be the 30th, since there are only 30 calendar days in the month of June.
Choose whether you want the payment term you are creating to be a global default or not. When should you do this? When a term is set as a global default, it means that for any new customer that is created, the selected term is automatically assigned to each customer as its default term. Terms can be a global default for customer or vendor records. You can change the default terms. For more on defaults for an individual, see Set or change default payment terms. Only one term can be marked as a global default for a customer. This means that when you select a term as Default for, the previous global default term will no longer be the default term. For example, The Due Upon Receipt term is currently marked as Default for Customer. You can click into a newly created term, Net30, select Default forCustomer, and click Save. By changing the global default for customer to the Net30 term, now your Due Upon Receipt term is no longer a global default for customer.
If you don’t want the payment term you create to be a global default ignore the Default for section under Term Preferences.
If you want the payment term you are creating to be a global default only for your customers, select Customer.
If you want the payment term you are creating to be a global default only for your vendors, select Vendor. Note: There must always be a global default. You cannot choose not to have a global default for an individual.
When you’re done, click Save, and your term is created.
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Add Interest to Payment Terms
You can add interests to payment terms if due dates are not met. For more information, see Transaction Hub Invoices module. Note: Read the LEGAL DISCLAIMER before saving the interest on the payment terms.
In the Interest tab on the Create a Payment Term page, turn on the Charge interest toggle.
Select an Interest Rate.
If you select Flat interest rate then enter the Flat Rate amount.
For interest rate in Percentage, enter the Annual Rate in percent and select a Charge Method.
For interest rate in Maximum of flat rate or percentage, enter the Flat Rate, or the Annual Rate and select a Charge Method.
Select the Charge Interest Frequency. For a Flat interest rate, this is Once by default.
Enter a Grace Period days number.
Select the invoices on which you want to apply the interest charge.
Select the Task for which you want to apply the interest.
When you’re done, click Save.
Important note: Some features may not be currently included in your account and additional configuration may be required. Please contact technical support for details.
Disclaimer: Information provided in this article is for informational purposes only and it should not be construed to be legal advice. Information provided in this article may also not constitute the most up-to-date legal or other information. You should not act or refrain from acting on the basis of any information in this article to meet any compliance requirements without seeking independent legal or other professional advice.