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

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.


Notes
Up Next: Setting up Credit Limit for Customers. 


      Zoho Campaigns Resources


        • Desk Community Learning Series


        • Digest


        • Functions


        • Meetups


        • Kbase


        • Resources


        • Glossary


        • Desk Marketplace


        • MVP Corner


        • Word of the Day


        • Ask the Experts


          • 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

          Zoho CRM Plus Resources

            Zoho Books Resources


              Zoho Subscriptions Resources

                Zoho Projects Resources


                  Zoho Sprints Resources


                    Zoho Orchestly Resources


                      Zoho Creator Resources


                        Zoho WorkDrive Resources



                          Zoho CRM Resources

                          • CRM Community Learning Series

                            CRM Community Learning Series


                          • Tips

                            Tips

                          • Functions

                            Functions

                          • Meetups

                            Meetups

                          • Kbase

                            Kbase

                          • Resources

                            Resources

                          • Digest

                            Digest

                          • CRM Marketplace

                            CRM Marketplace

                          • MVP Corner

                            MVP Corner




                            Zoho Writer Writer

                            Get Started. Write Away!

                            Writer is a powerful online word processor, designed for collaborative work.

                              Zoho CRM コンテンツ



                                ご検討中の方

                                  • Recent Topics

                                  • Projects custom colors replaced by default orange

                                    Since yesterday, projects uploaded to Zoho, to which I had assigned a custom color, have lost the customization and reverted to the default color (orange). Has anyone else had the same problem? If so, how did you resolve it?
                                  • Interview booked through Invite but no Notifications

                                    We have a workflow that was developed through a developer/partner that was tested and worked. Today, we pushed a candidate through the process and invited them to an in-office interview. They were sent the booking link (as usual and as tested before successfully)
                                  • Improve WhatsApp Module in Zoho CRM

                                    The current WhatsApp module UI in Zoho CRM feels cluttered and complex, especially when handling high volumes of conversations. It would be great to enhance the WhatsApp module UI/UX by adopting a clean and simplified interface similar to Bigin CRM’s
                                  • Automatiser la gestion des SLA dans Zoho Desk avec Zoho Contracts

                                    Les équipes du service client s’efforcent d’assurer un support rapide, régulier et fiable pour garantir la satisfaction de chaque client. Les accords de niveau de service (SLA) permettent de clarifier les engagements en définissant les termes et conditions
                                  • Create static subforms in Zoho CRM: streamline data entry with pre-defined values

                                    Last modified on (9 July, 2025): This feature was available in early access and is currently being rolled out to customers in phases. Currently available for users in the the AU, CA, and SA DCs. It will be enabled for the remaining DCs in the next couple
                                  • iOS App doesn't refresh for Document Creation

                                    Hello Zoho team, I have created a workflow to be used on a mobile iOS device which starts in Zoho Creater and ends with a murge and store function that then opens the newly created document within the Zoho Writer app. This process is working great however
                                  • Dynamic Field Folders in OneDrive

                                    Hi, With the 2 options today we have either a Dynamic Parent Folder and lots of attachments all in that one folder with only the ability to set the file name (Which is also not incremented so if I upload 5 photos to one field they are all named the same
                                  • Is it possible to transfer data from one related list to another within the same module ?

                                    In the Leads module, there is an existing default Product related list that already contains data. Recently, I added a custom multi-lookup field, which created a new related list in the same Leads module. Now, I need to move the existing data from the
                                  • Uploading a signed template from Sign to Creator

                                    Good day, Please help me on how to load a signed document back into Creator after the process has been completed in Sign. Below is the code that I am trying, pdfFile = response.toFile("SignedDocument_4901354000000372029.pdf"); info pdfFile; // Attach
                                  • Zoho DataPrep and File Pattern configuration

                                    I'm using Zoho data prep to ingest data from One Drive into Zoho Analytics... The pipeline is super simple but I can't any way to get all the files that I need. Basically I need to bring all the files with a certain pattern and for that I'm using a regex
                                  • Change User Role in a Form

                                    Hi, When in a form, it would be good (And consistent) to be able to change the user role/permission like you can with Shared Reports, All Entries or the actual User itself, rather than having to delete the users permission and then add it back again with
                                  • Assistance needed: Activation of a domain

                                    Hello Zoho Support, I purchased the .com domain "primesolva.com" via Zoho 6 days ago. The domain is still pending, and I cannot access the DNS panel to add the TXT verification for domain ownership. Please confirm the registration status and help me activate
                                  • Operation not permitted

                                    I am trying to add an email address to the list of user but I am getting error Operation not permitted
                                  • 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
                                  • 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,
                                  • How do I remove a data source from Zoho Analytics?

                                    I am unable to find a delte option on a datasource that i put in the system as an error. On teh web it refers to a setup icon but I do not see that on my interface?
                                  • 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
                                  • Next Page