How to Set Supplier Payment Terms and Early Payment Discounts

Why bills get paid late, or early without the discount

Each supplier gives different terms. One wants payment in 30 days, another offers 2% off if you pay within 10. When those terms live in a contract folder or someone's memory, the due date on each bill is a guess.

The result is either late payment and an unhappy supplier, or early payment that never claims the discount on offer. A spreadsheet of due dates also has to be updated by hand every time a bill arrives.

A payment term in Biznsbook holds the net days and the discount once. Give it to a supplier as their default and every new bill gets a due date and a discount date from it. A bill can still use a different term when this one invoice is different. Bills already saved keep the due dates they were given.

Why this happens

• Supplier terms are not recorded anywhere the bill can use.
• Due dates are worked out by hand for each bill.
• The last day for an early payment discount is not shown on the bill.
• A one-off term overwrites the supplier's usual terms by mistake.

Biznsbook addresses this through net days and discount terms, supplier default terms, due date on every bill, last day for the discount in the Purchase module, on the same orders, receipts, bills and stock records.

Purchasing problems rarely start with one big mistake. They start with a price nobody checked, a bill keyed twice, or goods used before anyone looked at them. Recording each step where it happens removes those gaps.

Step-by-step: Set Supplier Payment Terms and Early Payment Discounts

Written for buyers, store keepers and accounts payable teams in small and mid-sized businesses. The steps follow Purchase in Biznsbook.

1. Open Payment terms. Go to Purchasing → Payment terms. You need the Edit purchases permission.
2. Add a term. Enter a name and Due after (days). For an early payment discount, also enter Discount (%) and If paid within (days). 2/10 net 30 is due in 30 days, with 2% off if paid within 10.
3. Give suppliers a default term. Under Supplier default terms, tick the suppliers, choose the term and choose Apply. New bills from those suppliers use it. Bills already saved keep their due dates.
4. Set other purchasing defaults per supplier. Under Supplier purchasing defaults, each supplier can also have a Purchase currency for new orders and a Lead time (days). Choose Save on that row.
5. Override the term on one bill. On New purchase invoice, Payment term shows Supplier default. Pick another term if this bill is on different terms.
6. Check the dates on the bill. Bill details show the term, the due date and the last day for the discount.

Review results after the first full monthly cycle. Adjust roles, mappings, or approvals where the same exception repeats.

Inside Biznsbook, each Purchasing screen explains its own steps. This article explains the business process behind those screens.

Common mistakes to avoid

• Mistake 1: Supplier terms are not recorded anywhere the bill can use. Repeating this each month usually shows up first in a supplier paid the wrong amount, late, or for goods that never arrived.
• Mistake 2: Due dates are worked out by hand for each bill. Repeating this each month usually shows up first in a supplier paid the wrong amount, late, or for goods that never arrived.
• Mistake 3: The last day for an early payment discount is not shown on the bill. Repeating this each month usually shows up first in a supplier paid the wrong amount, late, or for goods that never arrived.
• Mistake 4: A one-off term overwrites the supplier's usual terms by mistake. Repeating this each month usually shows up first in a supplier paid the wrong amount, late, or for goods that never arrived.

Each of these shows up later as a supplier balance nobody can explain. Fix it on the order, receipt or bill rather than in a side spreadsheet.

Best practices that hold up as you scale

• Open Payment terms — Go to Purchasing → Payment terms.
• Add a term — Enter a name and Due after (days).
• Give suppliers a default term — Under Supplier default terms, tick the suppliers, choose the term and choose Apply.
• Set other purchasing defaults per supplier — Under Supplier purchasing defaults, each supplier can also have a Purchase currency for new orders and a Lead time (days).
• Override the term on one bill — On New purchase invoice, Payment term shows Supplier default.

Keep the order, the receipt and the bill linked, so every payment can be traced back to what was ordered and what arrived.

How Biznsbook supports this workflow

net days and discount terms is part of Biznsbook Purchase. It works on the same purchase orders, goods receipts and supplier bills, so stock, payables and the ledger stay in step.

supplier default terms is part of Biznsbook Purchase. It works on the same purchase orders, goods receipts and supplier bills, so stock, payables and the ledger stay in step.

due date on every bill is part of Biznsbook Purchase. It works on the same purchase orders, goods receipts and supplier bills, so stock, payables and the ledger stay in step.

last day for the discount is part of Biznsbook Purchase. It works on the same purchase orders, goods receipts and supplier bills, so stock, payables and the ledger stay in step.

Access is permission-based: viewing, creating, editing and approving purchases are separate permissions. Purchase orders and goods receipts need the Inventory module; postings to accounts payable need Accounting.

Suggested implementation timeline

1. Week 1: Set up net days and discount terms and give buyers and accounts payable the permissions they need.
2. Week 2: Run one supplier end to end in Biznsbook only: order, receipt, bill and payment, with no side spreadsheet.
3. Week 3: Review the exceptions with the people involved and adjust the rules where they disagreed.
4. Month 2: Roll out to every supplier and retire the old tracking sheet.
5. Ongoing: Monthly review using payment terms and the payment run.

Related guides

Cluster hub: Purchasing guides. Also see three-way match and, for approvals before an order, procurement guides.

The Purchase overview lists what the module includes; the Purchasing edition bundles it with receiving and accounting.

Industry: wholesale, manufacturing, retail.

Metrics to track monthly

• Open purchase order lines past their delivery date
• Bills waiting in bill matching
• Overdue supplier bills and bills due in the next 7 days
• Purchase price variance by supplier this month

Start with three metrics; trend direction matters more than a single point-in-time snapshot.

Spreadsheets and email vs Biznsbook Purchase

Compare a typical spreadsheet-and-email buying process with Biznsbook net days and discount terms and the related Purchase capabilities.

Payment terms and the payment run

Terms pay off when you pay. A payment run lists bills due by the date you choose plus any bill still inside its early payment discount on the payment date. The amount defaults to what the bill owes less the discount still available, and you can untick the discount to pay in full. Each discount taken is recorded as a supplier credit note on the bill. A bill on payment hold, because it does not match its order and the hold is set to Block, cannot be ticked in a run until the difference is accepted under Bill matching.

Write the rule into your purchasing procedure so buyers, store keepers and accounts payable follow the same steps, and revisit it each quarter.

Frequently asked questions

How this differs by industry