Terms Profiles

Terms profiles are sets of defaults that define the trading terms agreed with your customers. Separate terms may be agreed for particular customer groups or can be different for individual customers. Terms profiles are used to control various conditions of trading, including:

The selection of a default discount group defined in the Invoicing or SOP application.
The selection of a default price list defined in the Invoicing or SOP application.
The definition of a default overall invoice discount applied to transactions created using the Invoicing or SOP application.
The definition of settlement discount used to encourage early payment of outstanding invoices by offering a financial advantage.
The definition of the credit terms associated with sales invoices, specified either in a number of days starting from the invoice date, or a particular day in the first or second month after the invoice date.
The selection of an option that determines whether reminder letters can be sent to the customer for overdue debts and, if so, the definition of a minimum level of debt that determines whether the account qualifies for production of a reminder letter.
The selection of an option that determines whether the goods value on a sales invoice or credit note includes VAT.
Bank Account details.
Options that control whether statements, quotations, proforma invoices, sales orders, delivery notes and invoices can be sent to the customer by email.
Credit Management details - credit limit, credit limit reviewed date and the Credit Management Group allocated to the customer.

Terms profiles are defined using the Terms Profiles command on the Maintenance submenu. The profiles are then assigned to customer records using the Trading Terms form displayed when you select the Terms command on the Action menu opened from the Customer form. You can set up as many trading terms profiles as you want, but you do not have to attach a profile to a customer record. Instead, you can define a unique set of terms for a customer by completing the Trading Terms form without selecting a profile.

Example ...

Prerequisites

The following identifies prerequisite records that must exist before you can complete the corresponding boxes on the Terms Profiles form.

Box	Prerequisite
Discount Group	At least one discount group record must be created using the Discounts command in the SOP or Invoicing application.
Price List	At least one price list record must be created using the Special Prices command in the SOP or Invoicing application.

Settlement Discounts

Settlement discount is calculated automatically for transactions and deducted, on a line by line basis, before the calculation of VAT. Settlement discount terms can be allocated to customers in one of three ways:

By completing the boxes in the Settlement Discount area of the Trading Terms form associated with the Customer form without using a terms profile.
By completing the boxes in the Settlement Discount area of the Terms Profiles form and then selecting the profile in the Terms Profile list box on the Trading Terms form.
By completing the boxes on the Sales Options form that define the company defaults and then leaving blank the boxes in the Settlement Discount area of the Trading Terms form associated with the Customer form*.

Click here to see a flowchart of the checks that are made to decide whether settlement discount should be included on an invoice.

Debtors Letter Controls

Up to three levels of reminder letter can be printed automatically for outstanding debts. The letters are defined using the commands on the Utilities menu of the Sales application and printed using the Print Debtors Letters command on the Reports menu. The different levels of letter produced depend on the age of the outstanding debt, but you can also control whether a letter is printed according to a minimum debt level and you can also exclude customers from the letter production altogether. For example, you may have certain sensitive customers who you would never send reminder letters, so you want to ensure a letter is not printed even if the age of outstanding debt qualifies. It is also likely that there is a minimum amount below which it is not worth sending a reminder letter; for example, debts of less than a pound.

You can specify these controls as part of a terms profile, or where a profile is not used, directly on the Trading Terms form associated with the Customer form. The minimum debt can also be defined as a company default using the Debtors Letter Minimum box on the Sales Options form. To use this company default, you must not assign a terms profile to the customer record concerned, but instead complete the details manually on the Trading Terms form associated with the Customer form and set the Minimum Debt box to zero.

Note that setting the Minimum Debt box to zero on the Terms Profiles form does not result in the company default being used (that is, the minimum defined on the Sales Options form); instead it means that a customer using the profile will always receive a debtors letter regardless of the amount overdue.

To Define Sales Terms Profiles

Open the Sales Ledger folder and then click Maintenance or click the Financials tab and then click Sales Ledger - Maintenance on the Ribbon Bar.
Click Terms Profiles.
To create a new record, click the icon on the toolbar or press CTRL+N.
In the boxes provided, enter a code for the terms profile and its details.
To save the record, click the icon on the toolbar or press CTRL+S.

Terms Profile Entries

Box	Description
Profile	A unique reference for the sales terms profile. You can add a corresponding description in the Description box.
Discount Group	A reference that identifies the discount group for a customer group or a specific customer. Discount groups are defined using the Discounts command in the SOP or Invoicing application. If you leave this box blank and you have created a discount group record with a blank group code, the discounts from that table will apply to this customer.
Price List	A reference that identifies the price list for a customer group or a specific customer. You can select the price list from a list. Price lists are defined in the SOP/Invoicing - Maintenance - Special Prices command.
Invoice Discount	The amount, expressed as a percentage, of overall invoice discount to be deducted from all sales invoices raised for all customers associated with this profile. The discount is deducted after any line discounts have been taken and applies only to invoices or credit note transactions raised using the SOP or Invoicing application.
D/Charges	An option that determines whether the calculation of settlement discount includes delivery charges. If the option is cleared, the delivery charge specified on an invoice or credit note transaction raised using the SOP or Invoicing application will be excluded from the amount used to determine the settlement discount entitlement.
Days 1 and Days 2	The number of days that determines the period within which a customer is entitled to receive a discount on the invoice amount. You can specify two levels of discount according to two different periods. See also Percentage 1 and Percentage 2 below.
Percentage 1 and Percentage 2	The percentage of discount applicable to the corresponding number of days. The second rate and period must not be more favourable than the first.
Due Date Opt	An option that determines how the due date of a sales invoice is calculated. You can select from a list one of the following options: a number of days from the date of the invoice a specific day in the month following the invoice date a specific day two months from the invoice date. Having selected the option from the list, enter the corresponding number of days or the day number in the Day(s) box to the right of the Due Date Options list. Example: If you want the due date to be set to the last day of the following month, select 'Day of Month Following Invoice' and '31' days. This last day of the following month will then always be suggested in the Sales Ledger, Invoicing and Sales Order Processing applications.
VAT Return Reduction By	An option for customers you offer settlement discount to. When settlement discount is taken the VAT Return must be updated to account for the reduction in the goods and VAT values. Set to one of the following: 'Company Default' to use the setting from the Sales Ledger - Utilities - Set Options - Settlement Discount Options form. 'Credit Note' to account for the VAT Return adjustment by posting a credit note. 'VAT Adjustment' to account for the VAT Return adjustment using an adjustment posting directly after the receipt is posted. What controls how Opera calculates VAT on invoices with prompt payment discount? VAT in the UK must be calculated before any prompt payment discount (settlement discount) is calculated. Your VAT Return must be updated with the full VAT value when an invoice is posted, even if settlement discount is offered. How do you make sure VAT is calculated before prompt payment discount is calculated? If you use the EC VAT application ... Make sure the VAT After Discount (Settlement) option is selected on the EC VAT - Maintenance - Countries form. If you don't use the EC VAT application ... Make sure the VAT calculated before settlement discount from date is entered on the System - Maintenance - Company Profiles form. If the settlement discount is taken when an invoice is paid, an accounting adjustment must be made which does the following: post the discount for the reduction in the goods and VAT values adjust the goods and VAT values on the VAT Return. The accounting adjustment can be posted using either a credit note, or a VAT adjustment directly after the receipt or payment is posted: In the Purchase Ledger you define on each supplier record how the adjustment will be posted. In the Sales Ledger you can define it either from the Sales Ledger - Utilities - Set Options - Settlement Discount Options form, or on each customer record. If you use credit notes to account for the VAT adjustment, receipts involving settlement discount must be posted on account and then allocated to the invoice and credit note. Important: Customers are set to 'Company Default' for this purpose, so each customer uses the default setting on the Sales Ledger - Utilities - Set Options - Settlement Discount Options form. Suppliers are set to 'Credit Note' by default for this purpose. You may need to change them if necessary. This option is disabled if the VAT After Discount (Settlement) box is selected on the EC VAT - Maintenance - Countries form (if you use the EC VAT application).
VAT Code (for foreign customer)	An option for customers you offer settlement discount to. This relates to foreign customers only if the VAT Return Reduction By option is set to 'VAT Adjustment'. For foreign customers you must select the VAT code to use for VAT Return adjustments. This option is enabled for foreign customers if VAT Adjustments rather than credit notes are used for VAT Return adjustments.
Debtors Letter	An option that determines whether a letter is to be generated for the customer by the Print Debtor Letter command on the Reports menu. You can use debtor letters as part of your credit control procedures to remind the customer of overdue transactions.
Minimum Debt	This only applies if the Debtors Letter option is selected. Letters are only produced for outstanding values equal to or greater than the value you enter in this box.
VAT Inclusive	An option that determines whether the value of goods on sales invoice and credit note transactions includes VAT. If the option is selected, VAT is calculated on the assumption that the amount entered in the Goods Value box is the gross amount. The VAT portion of this is displayed in the VAT Amount box on the Analyse Customer Invoice form. If the option is cleared, VAT is calculated on the assumption that the amount entered in the Goods Value box is the net amount. The option applies to invoice and credit note transactions entered using the Processing command in the Sales application.
Last Modified	The date on which the terms profile record was last updated. You cannot amend this date directly.