Supplier Purchasing Controls Edit MPBD

The Supplier Purchasing Controls screen contains processing parameters, such as payment terms, that the Purchasing Management and Accounts Payable systems use for suppliers.

Payment Terms

Payment terms are a combination of credit terms and sales discounts. Credit terms are the length of time from the invoice date that a supplier extends before payment is due. For example, the credit terms for a sale can be thirty days from the invoice date. The invoice indicates payment is due net 30 days, net 30 or n/30. The credit terms can be twelve days after the end of the month you purchased the goods/services, represented by 12 e.o.m. or 12 e/o/m, on the invoice.

The sales discount or cash discount, is an early payment incentive offered by the supplier. For example, the credit terms of a sale are net 30 days but if you pay within ten days of the invoice date you can deduct 2% of the invoice total. Sales discounts usually appear as 2%/10 on the invoice. Since sales discounts work in conjunction with the credit terms, the supplier invoice expresses them together.

The payment terms appear as 2%/10, net/30 on the invoice, indicating that you can deduct 2% of the invoice amount if you pay within ten days. If you do not pay within ten days you must remit the full amount of the invoice within thirty days of the invoice date.

You set up credit terms on the Settlement Terms screen MPAH. Set up sales discounts on the Discount Terms screen MPAF.

Enter credit terms and sales discounts for a supplier on the Supplier Purchasing Controls screen MPBD.

For example, you can enter up to three sales discount terms for each supplier, as follows:

When you enter an invoice, the system automatically applies the supplier's payment terms unless you override them for the invoice. You can override both credit terms and sales discounts, usually offered by the supplier. When you make payments, the system uses the payment terms for each invoice to ensure proper payment.

Adding or Amending Supplier Purchasing Controls

1. Click the Pur Cntrls button on the Supplier Name screen MPBB to access the Supplier Purchasing Controls screen MPBD.
2. Enter the following fields on the Processing format of the Supplier Purchasing Controls screen MPBD:
   1. Enter a two-digit Category Code to categorise suppliers for the purpose of defining the amount of days fully paid transactions should remain on the account, for online enquiries before being archived .
   2. If desired, enter any optional fields.
3. Click the Discount tab to access the Discount format.
4. On the Discount format of the Supplier Purchasing Controls MPBD, enter the following fields:
   1. Enter a Settlement Terms code. Settlement terms indicate when the system calculates invoices as due for payment. On data entry screens, you can enter the due date manually if the system-calculated date does not apply to that transaction.
   2. You must enter a code at Discount Terms 1. Discount Terms 2 and 3 are optional. The system automatically calculates the discount percentage, associated with the discount code, for all transactions on the supplier's account. You can override the system-calculated discount later in the data entry process. For example:

1. 3. • Discount 1 represents 10% receivable if the invoice is paid in 5 days.
      • Discount 2 represents 5% receivable if the invoice is paid in 15 days.
      • Discount 3 represents 2% receivable if the invoice is paid in 30 days.

If an invoice dated 1/4/97, is paid within the first five days of this date, a 10% discount applies. If the transaction is paid between 6th and 15th day from the invoice date, a 5% discount applies. If the transaction is not paid until the 16th to 30th day, only a 2% discount applies.

1. 3. If desired, enter any optional fields.

5. Click the Update button to accept the changes to the screen and to return to the Supplier Name screen MPBB.

Screen Specific Actions

See also

Accounts Payable Home Page