Payment Terms UI

This article explains the Payment Terms UI in the Timing modal.

You will learn:

• Where to set payment terms.

• What the main payment term options mean.

• How payment terms feed into receivables, payables and cashflow.

Payment terms define the gap between accrual and cash movement.

1

Where payment terms are set

Payment terms are configured in:

• The Timing modal for each variable.

• Presets that include payment profiles.

• Occasionally import mappings where default terms are applied.

The payment terms section is usually clearly labelled and sits close to delay settings.

2

Payment term options

Common options include:

• Immediate

  • Cash and accrual occur in the same period.

  • No receivable or payable is created.

• Fixed number of days

  • For example 7 days, 14 days, 30 days, 60 days.

  • The engine converts days into the appropriate period offset based on model granularity.

• Fixed number of months

  • For example 1 month, 2 months, 3 months.

  • Cash occurs the specified number of periods after accrual.

• Custom terms

  • Can represent more complex business rules through combinations of delay and schedule settings.

These options are chosen via dropdowns and numeric input fields.

3

How payment terms interact with variables

When you set payment terms for a variable:

• The variable's accrual still happens according to its own schedule.

• Cashflows are shifted according to the payment terms.

• The difference between accrual and cash is recorded as Accounts Receivable or Accounts Payable (or related payables for staff and tax).

This affects both working capital and the Cashflow Statement.

4

Validating payment terms

To validate payment term configuration:

• Use the Timing preview to see how accrual and cash curves differ.

• Inspect the Cashflow Statement to see when receipts or payments land.

• Check the Balance Sheet for sensible receivable and payable balances.

If numbers look too smooth or too volatile, review the payment term settings.

5

Best practice

Good practice for payment terms includes:

• Matching the terms you set to real contracts or typical behaviour.

• Using consistent defaults for similar customers or suppliers.

• Documenting any unusual terms in variable notes.

• Avoiding unnecessary complexity for items where timing has little impact.

This keeps working capital behaviour predictable and easy to explain.

Related articles

• Accrual Behaviour

• Timing Modal Overview

• Cash Priority Rules

• Build an LBO Model