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Billing terms and conditions template for Finance

what are payment terms or more specifically what are the requirements for payment on an invoice sent by a business to a customer or client requesting payment in this video we're going to talk about some of the most common terms or Provisions used requesting payment first off Pia this is an acronym you will return routinely see on an invoice it stands for payment in advance this is relatively obvious it requires payment prior to shipment or delivery of goods or service net 30 60 90 means that payment should be made within the stated period so net 30 means payment should be made within 30 days this is oftentimes combined with a percentage discount then a net period of payment so say one percent 10 net 30. that would say a one percent discount if you pay within the first 10 days of receipt of invoice if not then the entire amount is due 30 days for mercedive invoice so one percent ten one percent discount if you pay within that 10-day period next eom end of month so whatever month you're in if the invoice States eom the due date is the end of that respective month 15 mfi and 15 is just an example you can change this number ingly but it's the date in the month following the invoice date so 15 mfi simply means the 15th of the following month so say I invoice you in June 15 mf5 then by the 15th of July spec payment okay so next CoD this is cash on delivery meaning payment must be made on delivery now generally this is not necessarily cash but it is a form of cash equivalent payment due at the time of delivery of a good or service okay cash next delivery this is usually on recurring installment contracts where you're delivering multiple installments of a good or service and so you pay for the previous shipment or delivery or provision of services at the time of the delivery of the next batch so before you can receive that next batch you pay for the previous batch okay cash before shipment again this is very similar to pay in advance but prior to Goods being shipped you can place an order oftentimes they are manufactured things of that nature but before they will actually be put into uh the chain of shipment or the supply chain that they must be paid for okay CIA this is similar to payment in advance cash in advance it's just a bit more specific in terms of the type of of liquidity required in the payment okay cash with order this means before the order will even be processed so nothing happens until payment is made then the order is processed so again a bit more specific for dating means that you'll be invoiced after receipt of the order generally this is between business businesses that have a continued or ongoing relationship and then accumulation discounts these are specific discounts that you get based upon the size of the order so it will state specifically a percentage discount or a volume discount or a per unit item discount that you get based upon the size of the order okay next a partial payment discount again this is a uh an allowed payment up front for receipt of the goods with the rest of the payment being deferred until a later period of time so you get a discount generally on the payment up front with financing of the remainder over a longer period of time a rebate is a amount you get returned to you for the purchase it is generally some type of promotional thing where if you purchase a specific item or you purchase a specific series of items then they will give you the money back as oftentimes done when you have a distributor or retailer of a good who will receive some type of rebate from the manufacturer or distributor of the good and some of that amount that they received back from the manufacturer distributor is then trans transferred to the purchaser as a type of incentive for purchase Contra that is an offset of anything owed to the the purchaser by the seller so the invoice notes that whatever is owed on the invoice the amount owed to the seller is offset by that amount so a lesser amount and these are some of the primary payment terms that you will see associated with an invoice