Credit Management: #2 Configuring Right Payment Terms for Credit Control

Think about the last time you ordered something online and saw that little note at the checkout, "Pay on Delivery" or "Pay later".

It's simple, but it actually sets the tone. As a business owner, you know exactly when payment is expected.

Now, imagine a local printing shop that supplies business cards to offices around the town. Some clients pay immediately, while others take 30 days to clear invoices. If everyone pays on their own schedule, the shop's cash flow would become unpredictable overnight.

That's where Payment Terms become crucial. They define the rules for payment, set expectations upfront, and form the foundation of good credit management.

Why Setting up Payment Terms is Important? 

Payment terms are more than dates on an invoice. They are agreements that balance trust, flexibility, and financial control. They determine when payment is due, how it should be made, and what happens when the payment is delayed.

Setting up clear payment terms protects both sides of a transaction. Customers know exactly when payment is expected. On the other hand, businesses can forecast revenue, plan their expenses, and maintain a steady cash flow.

Even the best credit tracking system can't prevent delays or disputes when payment terms are vague or unclear.

Standard Payment Terms in Business  

While every industry defines terms differently, most of them follow familiar patterns. Let's look at the most common ones with examples to help you visualise them.

Immediate (Due on Receipt):

Payment is expected as soon as the invoice is issued. This is most popular in retail sales and one-time services.

For example, a freelance photographer delivers final photos and sends an invoice marked "Due on Receipt." The client pays immediately via card or online transfer.

Shot- Term Credits (Net 5/Net 7/Net10/Net 15):

These terms allow customers a short grace period to make payments. They are common in fast-moving businesses where the cash flow cycle is tight.

For instance, an event management company gives the office 10 days to pay after each event. This builds loyalty while keeping payments predictable.

Standard Credits (Net 30/Net 45/Net 60):

These are the most widely used payment terms in B2B sales. They give customers flexibility while ensuring the business has a steady cash inflow.

A software reseller issues invoices on Net 30 terms, giving customers a full month to pay while they plan their cash outflows.

End of the Month (EOM or Net 30 EOM):

Here, invoices are due a certain number of days after the end of the month they were issued. It simplifies accounting for customers handling multiple purchases.

Imagine a stationery supplier invoices schools throughout the month, but all payments are due 30 days after month-end, making bookkeeping easier for both sides.

Milestone or Progress-Based Terms:

Payments are linked to project stages rather than just dates.

A construction firm bills 20% upfront, 50% mid-project, and the remaining 30% at the end, ensuring steady cash while aligning with project delivery.

Downside of Improper Payment Terms 

Your payment terms directly influence your business's cash flow. To be precise, shorter terms improve liquidity but can strain customer relationships. Long-term improves customer flexibility but stretches receivables.

Setting up consistent and transparent payment terms helps businesses to avoid unpredictable gaps between invoices and payments.

Configure & Manage Payment Terms in Zoho Billing 

Defining and enforcing payment terms becomes easy when your billing system handles them automatically.

With Zoho Billing, businesses can:

• Set flexible payment terms per customer or invoice.

• Automate due date calculation based on chosen terms.

• Show the payment terms clearly on the invoices and email notifications sent to customers.

• Send automated reminders before and after the set due date.

• Apply a late fee based on the due date.

• Track receivables based on the ageing report to find customers with chronic delays.

By setting the right payment terms along with the automations, you can ensure that every credit sale has a timeline, every invoice is accountable, and every customer relationship is transparent.

A reasonable credit control starts not from cashing payments but from setting expectations early and managing them consistently.

Letting customers pay on credit is one side and allowing credits a threshold of credits is another leverage many businesses offer these days.

Up Next: Setting up Credit Limit for Customers. 

• Topic Participants

• Hari Hara Sudhan. S

  

• Joshua Hamilton

• Prabhu Seshaadri C

  

• Sticky Posts

• Community Learning Series | Digest #5 — September 2020

  Dear customers, We're happy to bring you the September edition of our #CommunityDigest! Keep track of your subscription KPIs right from your smartphone: Last month, we enhanced our Android mobile app to help our customers get daily updates on their business health. We got to know from a lot of customers that this has made their job much more easier because they no longer have to keep a reminder to manually check on the previous day's revenue or activations. If you have not downloaded it yet, here's

• Community Learning Series | Digest #4 - August 2020

  Dear customers, We hope you're staying safe and healthy. I'm happy to bring you the fourth edition of our #CommunityDigest with some brand-new updates from us. 1. Daily Business Updates (for Android users) The Zoho Subscriptions Android app has got a cool new update: You can now get a push notification to your smartphone that lets you know how many activations and cancellations have taken place, and what's the net revenue for the previous day. The best part is, you can tell the app when exactly you

• Community Learning Series | Digest #3 - July 2020

  Dear customers, We hope you're staying safe and healthy. We're glad to bring you the July edition of our #CommunityDigest. New community members can view our previous newsletters here. This time, we have two major updates and three interesting topics for you: 1. Zoho Subscriptions Developer Community Since the inception of Zoho Subscriptions, our team believed that the recurring billing platform we provide should be able to offer an extensive API library that empowers businesses to automate most

• Introducing: Community Learning Series | Digest #1 - May 2020

  Dear customers, We hope you are staying safe and healthy. Helping businesses manage their customer subscriptions more efficiently has always been, and always will be, our goal at Zoho Subscriptions. We strongly believe this is possible if we grow together as a community and share what we know with each other. To nurture this shared learning experience, here is our brand-new Community Learning Series! ​ Welcome to the first edition of our digest! Each edition of our community digest includes guides

• Recent Topics

• Cannot connect to imap.zoho.eu on iOS26

  Hey, I recently migrated to another iPhone and since then use iOS26. Every since then, I was not able to connect to "imap.zoho.eu" from Apple Mail. I tried deleting the account and adding it again, did not work. I tried creating an app password, didn't

• Request to Permanently Delete Email User (info@mehbobgulf.com ) from Old Organization

  Please permanently delete the user email info@mehbobgulf.com It is still associated with my old Zoho organization. I cannot delete it because it shows ‘You cannot delete email. Zoho host’. I need to use this email in a new Zoho account.”

• Client host [89.36.170.5] blocked using Spamhaus

  Hello please make make actions for delist ..... "Client host [89.36.170.5] blocked using Spamhaus"

• Suggestion: Option to Re-run a migration

  As I'm going through a migration process, I like the IMAP migration tool, but it would be better if there were an option to re-run the same migration as configured. There's not even an option to copy/edit one that's already there. Just run if it hasn't

• Issue with "Add Your Mobile Number"

  Hello, I am trying to sign up for email service for a domain name, and I cannot finish the authentication. When I enter my mobile number, I receive the message "We’re unable to send OTP to this mobile number. Please contact support-as@zohocorp.com". I

• zoho mail non vérifié

  Bonjour, Il y'a un jour que j'ai acheté un domaine et toute les tentatives pour l'associé a mon compte shopify son vaine. j'ai essayé TXT sans suite après, j'ai essayer avec CNAME sans suite. j'aurais besoin de votre assistance pour associé mon mail.

• Unable to send message;Reason:553 Relaying disallowed. Invalid Domain

  i have facing the issue "Unable to send message;Reason:553 Relaying disallowed. Invalid Domain" if i verify domain evertthing i did but still face the same error.

• ZohoMail is so close to being Perfect BUT

  Why don’t you have HILIGHTING???!! I've been trying to find a substitute for Edison Mail but I want & need hilighting (preferably in more than just yellow)! Is this even on your To Do list? I’m so disappointed. 🙄

• Override Auto Number field?

  We are preparing to migrate from Salesforce. In Salesforce, we auto-generate a unique number on our Opportunities (Potentials). If the Opportunity results in a contract, we use that unique number as the Contract number. There are some situations where

• Improved Contact Sync flow in Google Integration with Zoho CRM

  Hello Everyone, Your contact sync in Google integration just got revamped! We have redesigned the sync process to give users more control over what data flows into Google and ensure that this data flows effortlessly between Zoho CRM and Google. With this

• Using a third party service provider want to move directly with Zoho

  Hi good day I’m currently using Zoho but I’m using a third party service provider I want to move directly with you guys I’m using Zoho email and invoices and my domain please let me know if it’s possible to move away from the third party provider my email

• Request for Assistance Regarding Email Sending Issue (554 5.1.8 - Email Outgoing Blocked)

  Dear Zoho Support Team, I hope this message finds you well. I am writing to request assistance with an issue we are currently facing regarding our Zoho Mail account. Our email account, admin@tuyensinhcanuoc.com, is encountering the following error when

• Zoho Mail API returns empty inbox (0 messages) but webmail shows 37 unread emails

  Hello, I'm experiencing a discrepancy between Zoho Webmail and the Mail API (EU region). **Setup:** - Account: EU datacenter (mail.zoho.eu) - API: Self Client OAuth2 via api-console.zoho.eu - Scopes: ZohoMail.messages.READ, ZohoMail.messages.UPDATE, ZohoMail.folders.READ,

• Zoho Mail not working

  Zoho Mail not working

• ShipStation and Zoho Inventory

  Hello, I am looking to sync zoho inventory with shipstation ZOHO INVENTORY           SHIP STATION Sales Order  ==>  create ORDERS INVOICE  <==    Shipments What exactly does BETA mean on the Shipstation connector?  This is required for me to sign-on in the next month. Thanks in advance for your efforts

• Are there settings for hyperlinks?

  Clicking a hyperlinked cell in Sheet creates this little pop-up with the actual hyperlink inside. Is it possible to have a 1-click link where if you click the cell it opens the link directly with no pop-up?

• 550 5.4.6 Unusual sending activity detected. Please try after sometime

  Hi, I am receiving this error message when trying to send my emails. The only reason I can think why this is happening is my previous two emails were bounced back to me due to a non working mailbox error. I have followed the online links for unblocking but it says there are no blocks on my account. How and when can I get my email working again to send emails? Thanks,

• E

  We are trying to add our Zoho Form embed in our Elementor Page Builder. After adding Zoho Forms widget in elementor page builder it’s displaying in backend page builder but it’s giving 403 error while trying to save, as it’s not reflecting in front end.

• Kaizen #225 - Making Query-based Custom Related Lists Actionable with Lookups and Links

  Hello everyone! Welcome back to another post in the Kaizen series! This week, we will discuss an exciting enhancement in Queries in Zoho CRM. In Kaizen #190, we discussed how Queries bridge gaps where native related lists fall short and power custom related

• Ability to Edit YouTube Video Title, Description & Thumbnail After Publishing

  Hi Zoho Social Team, How are you? We would like to request an enhancement to Zoho Social that enables users to edit YouTube video details after the video has already been published. Your team confirmed that while Zoho Social currently allows editing the

• Formatting Problem | Export to Zoho Sheet View

  When I export data to Zoho Sheet View, ID columns are automatically formatted as scientific notation. Reformatting them to text changes the actual ID values. For example, 6557000335603071 becomes 6557000335603070. I have attached screenshots showing this

• Add Attachment Support to Zoho Flow Mailhook / Email Trigger Module

  Dear Zoho Support Team, We hope you are well. We would like to kindly request a feature enhancement for the Mailhook module in Zoho Flow. Currently, the email trigger in Zoho Flow provides access to the message body, subject, from address, and to address,

• Connecting Zoho Inventory to ShipStation

  we are looking for someone to help connect via API shipStation with Zoho inventory. Any ideas? Thanks. Uri

• Clone / Export Popup Design Across PageSense Projects

  Hello Zoho PageSense Team, We hope you’re doing well. We would like to request an enhancement that allows popup designs to be reused across different PageSense projects. Problem Statement: Currently, Zoho PageSense allows popups to be duplicated only

• custom module import.

  Is there a way to import data into a custom module? Thanks Rudy

• IF Statement in Zoho CRM Formula Field

  Hi, I am attempting to write a formula field that will give me one result if one statement AND another statement are true, then a different value if the first statement AND a different statement are true, else 0. Stated differently: if account = destination

• HEIC File Type Viewer

  Hi, It would be nice to be able to click on the images in the All Entries/Reports Tables which are HEIC the same as JPG, PNG, etc. so they open in a viewer from Zoho or the Attachment Service, today HEIC requires you to download each image and open it

• Building Toppings #4 - Setting up and using connections in Bigin toppings

  When building a topping to extend Bigin's functionality and connect it with third-party applications, creating and handling connections is an important step. Connections provide a secure way for your topping to authenticate and communicate with other

• Free Webinar: Zoho Sign for Zoho Projects: Automate tasks and approvals with e-signatures

  Hi there! Handling multiple projects at once? Zoho Projects is your solution for automated and streamlined project management, and with the Zoho Sign extension, you can sign, send, and manage digital paperwork directly from your project workspace. Join

• Need code format to specify default values

  Can someone please direct me to the code syntax or the proper translation per the instructions circled below. These instructions don't seem correct.

• AI Interview Insights: Turn Recorded Interviews into Quick Transcripts & Summaries

  Evaluating interviews shouldn’t require replaying long recordings or taking manual notes. With AI Interview Insights, you can now review complete transcripts and AI-generated summaries of your One-way (Recorded) interviews right inside Zoho Recruit. This

• OAuth integration issues

  I'm experiencing persistent OAuth errors when trying to connect Make with Zoho API. I've tried multiple approaches but keep encountering the following issues: First error: 'Invalid Redirect Uri - Redirect URI passed does not match with the one configured'

• Facing email delivery issues? Verify your domain's DNS records

  Have you ever wondered why your legitimate emails are landing in the recipient’s spam folder? Or been surprised to see emails sent from your registered domain getting rejected by recipient email servers? Why does this happen? In most cases, this happens

• Adding Markdown text using Zoho Desk API into the Knowledge Base

  Hi Zoho Community members, We currently maintain the documentation of out company in its website. This documentation is written in markdown text format and we would like to add it in Zoho Knowledge Base. Do you know if there is REST API functionality

• Order of Departments in Help Desk

  In the end user portal, , the departments are sorted by the date of creation of the department (or perhaps their id). Is there a way to choose the display order of the departments or at least to be able to sort them alphabetically?

• COGS - Account showing negetive

  I have multiple COGS account and in these all there is one account is negetive so suggest why it is showing negetive value.?

• Create CRM Deal from Books Quote and Auto Update Deal Stage

  I want to set up an automation where, whenever a Quote is created in Zoho Books, a Deal is automatically created in Zoho CRM with the Quote amount, customer details, and some custom fields from Zoho Books. Additionally, when the Sales Order is converted

• %PaymentLink%

  Does not work. Software creates a BAD link. ....and yes payment options are turned on. Link on the invoice pdf once opened will work but this template is a joke.

• Google Photos

  I am hoping that my question already has a fix. I current have Google synced accounts that I want to get away from. One in particular on is Google photos. Is there any software, or 3rd parties that I can join to back my photos up straight to specifically designated file in the ZOHO cloud that's tied to Docs? Please advise... Mike 

• 1stDibs Integration to Zoho Inventory

  Hello is it possible to integrate my Zoho inventory and 1stDibs?

• Next Page