Payment Terms Examples

• When payment is expected
• Any conditions on that payment
• Any discounts the buyer will receive

Payment terms can apply to any party in the sale, from the wholesaler to the individual consumer.

Common Invoice Payment Terms

• PIA - Payment in advance
• Net 7 - Payment seven days after invoice date
• Net 10 - Payment ten days after invoice date
• Net 30 - Payment 30 days after invoice date
• Net 60 - Payment 60 days after invoice date
• Net 90 - Payment 90 days after invoice date
• EOM - End of month
• 21 MFI - 21st of the month following invoice date
• 1% 10 Net 30 - 1% discount if payment received within ten days otherwise payment 30 days after invoice date
• COD - Cash on delivery
• Cash account - Account conducted on a cash basis, no credit
• Letter of credit - A documentary credit confirmed by a bank, often used for export
• Bill of exchange - A promise to pay at a later date, usually supported by a bank
• CND - Cash next delivery
• CBS - Cash before shipment
• CIA - Cash in advance
• CWO - Cash with order
• 1MD - Monthly credit payment of a full month's supply
• 2MD - Monthly credit payment of a full month's supply plus an extra calendar month
• Contra - Payment from the customer offset against the value of supplies purchased from the customer
• Stage payment - Payment of agreed amounts at stage

Discount Payment Terms

• Accumulation discounts - Discounts for large purchases
• Coupons - These have certain terms, such as a certain quantity has to be purchased or if the customer is past a certain age
• Disability discount - Offer to customers with a disability
• Discount card - Issuing cards that give certain customers or any customer a discount
• Educational or student discount - Usually given to students, but may go to educators
• Employee discount - Offered to employees
• Forward dating - Moving the invoice date forward so that the payment is made after receipt of goods
• Military discount - Offered to members of the military and family members
• Partial payment discount - When a seller needs cash flow, he may offer a partial discount
• Preferred payment method discount - Some retailers give customers a lower price if they pay with cash. This saves the fee the retailer pays on credit cards.
• Prompt payment discount - The wholesaler or manufacturer gives a discount to the retailer at the list price or catalogue price. This sometimes applies to promotions.
• Rebates - A refund mailed to the purchaser after a purchase
• Sliding scale - This discount is calculated on a person's ability to pay. This is common with non-profit organizations.
• Seasonal discount - Usually this is given during a slack period when sales are down.
• Toddler discount, child discount, or kid discount - This covers free or discounted prices for children under a certain age. There is usually a requirement that an adult pay full price.
• Trade discount - Payments for functions such as shelf stocking, warehousing or shipping
• Trade-in credit - A discount for something that is returned

These examples of payment terms show the wide variety of terms that can be offered by the vendor.