What is a Payment Terms in Business Central?

Codes defining when and how vendor invoices must be paid, such as Net 30 or 2/10 Net 30, configured on vendor cards.

Payment Terms in Business Central define the payment conditions for vendor invoices — when payment is due and whether early payment discounts apply. Common examples include Net 30 (pay within 30 days), 2/10 Net 30 (2% discount if paid within 10 days, otherwise due in 30), and COD (cash on delivery).

Payment terms are configured on the Vendor Card and automatically applied to every purchase document for that vendor. They calculate the due date and any discount date on purchase invoices, which feeds into the payment journal and cash flow forecasting.

Managing payment terms strategically is important for working capital. BC's payment journal uses due dates from payment terms to suggest which invoices to pay, helping AP teams optimize cash flow while capturing available early payment discounts.

Related terms

• Vendor (Supplier) — A company or person from whom you purchase goods or services, represented as a Vendor Card in Business Central.
• Purchase Invoice — A document recording a vendor's bill for goods or services received, used for accounts payable processing in Business Central.
• Vendor Ledger Entry — The detailed transaction log in BC recording every financial event related to a vendor — invoices, payments, and credit memos.
• Purchase Prepayment — An advance payment made to a vendor before goods or services are delivered, tracked against the purchase order in BC.

How Zentriq helps

Zentriq's AI tools automate many of the manual processes around payment terms in Business Central. Learn about the Zentriq Agent or try Zentriq PunchOut to see how AI simplifies procurement in BC.