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

• Zoho Meeting Android app update: Breakout rooms, noise cancellation

  Hello everyone! In the latest version(v2.6.1) of the Zoho Meeting app update, we have brought in support for the following features: 1. Join Breakout rooms. 2. Noise cancellation Join Breakout rooms. Breakout Rooms are virtual rooms created within a meeting

• iOS 12 update: Introducing autofill passwords and Siri Shortcuts in Zoho Vault

  With this iOS 12 release, Zoho Vault users can now autofill usernames and passwords on Safari and other third-party apps. Users can enjoy a seamless login experience to their everyday apps without compromising security and also access passwords stored in Zoho vault with Siri Shortcuts by adding personalized phrases. How to enable autofill password on your iOS device? First, you need to update your device to iOS 12.  Apple recommends you to take a backup before you update your device to the latest

• Zoho Vault: A look at what's new for iOS, iPadOS, and macOS

  Hi everyone, At Zoho Vault, we constantly aim to improve your security experience. Based on both internal and external feedback, we have recently rolled out updates across our iOS, iPadOS, and support for macOS platforms. Introducing the desktop app for

• Biometric Access Support on Zoho Vault Desktop App

  Is there any plans to add biometric authentication (fingerprint, face recognition) for Vault desktop apps (Windows/macOS) to enhance security and ease of access. I would love to hear other members view on this

• Free webinar: Learn the benefits of migrating to Zoho Vault's new interface

  With remote work becoming more and more common across the globe, productivity and time management are now pivotal concerns for every organization. With the number of business applications employed by companies constantly increasing, a password manager like Zoho Vault saves a lot of productive hours for your team. Vault's new interface has been carefully designed to address these pressing needs, helping users increase their productivity while improving their overall online experience.  This July,

• Free Webinar: An exclusive live Q&A session with the Zoho Vault team

  As 2020 draws to an end, we're closing out a year that has seen drastic changes all around the world. Many businesses have adopted cloud solutions and a remote work culture for the first time, and this has given rise to newer cyber risks and threats that

• Why passwordless authentication should be your top security project for 2021

  Hello users! We know that nobody likes to remember passwords, yet they form an indispensable part of our lives. Many of us working with any kind of technology today manage numerous passwords for personal and business accounts. With the widespread adoption

• Free Webinar: See why Zoho Vault is the best alternative to LastPass

  When LastPass was acquired by LogMeIn in Oct 2015, we expressed our genuine concern about how this would change the LastPass business model and how customer trust would transfer from one company to another. As we suspected, LastPass doubled their pricing

• Managing cyber threats when working remotely | A Customer Survey Report

  The nearly universal adoption of remote work has changed the way businesses function. Globally, enterprises continue to work to find new ways to make life easier for employees working remotely. However, a commonly cited concern has been the lack of cybersecurity

• World Password Day: 5 interesting facts about passwords

  It's World Password Day: that time of the year when we talk about password hygiene and the importance of safe password management. World Password Day is observed on the first Thursday of every May, and this year, we'd like to talk about some of the most

• Free Webinar: Go passwordless in 2022 with Zoho Vault

  Passwords have long been the preferred authentication method, largely due to their universal appeal. While they're easy for people to use and implement, they're also convenient for hackers to exploit. Reports from 2021 state that weak and stolen passwords

• Myki has announced EOL for its services | Learn why Zoho Vault password manager is the best alternative

  Hello Myki users,   Myki has announced end-of-life for its Teams, MSP, and GUARD services, after being acquired by JumpCloud. In their recent announcement, Myki stated that they will be removing their apps and extensions from the respective stores, turning

• Join our exclusive meetup with Zoho's Real Estate community

  Hey there, The Zoho Vault team is conducting a meetup for all real-estate users from Zoho. During this session, we will be discussing the need for secure password management and how Vault can help you and your clients safely protect passwords and other

• Free webinar: A quick walkthrough of Zoho Vault and major updates in 2023

  Managing passwords is crucial for all businesses. You can securely store, share, and manage passwords effectively from anywhere with Zoho Vault. We have introduced several new features in 2023 to offer the best online experience for our users. Join our

• Free webinar: Why a password manager is a “must-have” for everyone in 2024

  In the past decade, we've witnessed numerous cybersecurity breaches globally, with a significant portion resulting from the "it won't happen to me" mindset. Shockingly, in 2023, 86% of breaches involved weak and stolen passwords. Password hygiene is crucial

• Zoho Vault - Webinars 2023 - Video Recordings and Slide Decks

  Hello, We wanted to offer a consolidated list of Zoho Vault webinar resources from 2023. Therefore, we're putting together a list that includes links to our webinar recordings and slide decks for easy access. Webinar Video recording Slide deck Getting

• Free webinar: ‌Focal point: Building a financial ecosystem with Zoho Vault and Zoho Workplace

  Hi everyone! Cyber threats against the financial sector are escalating. In the last two decades, nearly one-fifth of reported incidents targeted financial institutions, causing $12 billion in direct losses. Cybercriminals are becoming more sophisticated,

• New features in Zoho Vault

  We’re thrilled to introduce a wave of powerful updates in Zoho Vault, designed to enhance security, streamline workflows, and improve your overall experience. Let’s dive into what’s new! Folder creation restrictions Limit who can create folders in your

• Join our World Password and Passkey Day expert Q&A 2025

  Hey everyone! World Password and Passkey Day is almost here, and there's no better time to talk about something we all rely on daily—secure authentication. Did you know that a staggering 60% of hacking-related breaches are tied to weak or stolen passwords?

• Dashlane discontinued its free plan: Here's why Zoho Vault's free plan is worth the switch

  Hey everyone, Dashlane password manager has officially announced that its free plan will be discontinued starting September 16, 2025. This change means that current free users will need to either upgrade to a paid subscription or export their data and

• Introducing SecureForms in Zoho Vault

  Hey everyone, Let’s face it—asking someone to send over a password or other sensitive data is rarely straightforward. You wait. You nudge. You follow up once, twice—maybe more. And when the information finally arrives, it shows up in the worst possible

• Clickjacking: Zoho Vault's Response

  Issue: Password manager browser extensions are found to be vulnerable to clickjacking security vulnerabilities that could allow attackers to steal account credentials, TFA codes, and card details under certain conditions. Reported by: Marek Toth, Independent

• Free webinar: Security that works: Building resilience for the AI-powered workforce

  Hello there, Did you know that more than 51% of organizations worldwide have experienced one or more security breaches, each costing over $1 million in losses or incident response? In today’s threat landscape, simply playing defense is no longer enough.

• Free webinar—Redefining workforce security with Zoho Vault: Passwords, passkeys, and multi-factor authentication

  Hi everyone! Did you know that in Q2 alone, 94 million data records were leaked globally? Behind every breach is a combination of poor password habits, phishing attacks, privilege misuse, and simple human error. The fallout—including reputational damage,

• Fill Colors

  Hello, Just curious, is it possible to manage the Used and standard colors in the fill drop down menu ? I would like to change/edit them is possible to colors I frequently use. Thanks for you reply, Bruce

• Fillable template with dynamic tables?

  Is there a way to build a fillable template so that users can add rows to a table? To describe what I'm trying to accomplish the table has 3 sections; a header row, some number of rows with custom information, and a summary row with totals. I can't figure

• Invoicing multiple expense items as a single line item

        My client would like me to invoice them for multiple expense items on a single line item on an invoice.  Can this be done?  I know I can import billable expenses to an invoice, but I don't know how to show them as a single line item or have them

• Tables improvement ideas / features

  Heya, I've been using Zoho Tables for a few months now and wanted to post some features that I think will be greatly beneficial for the tool: 1. Ability to delete a record in automation or move a record in automation. - Usecase: I move a record from one

• Announcing offline payment modes for event tickets

  Hello everyone,   Collecting ticket payments from prospective attendees can be a tricky part of event planning. While Zoho Backstage has always allowed you to collect payments online as people buy tickets from your event microsite, we have now enabled

• Gmail is ramping up its email sender policy from November 2025

  Hello marketers, As you may be aware, Gmail introduced a guideline for bulk senders starting February 2024. If not, here's a quick refresher straight from Google: After this policy was announced first in 2023 and soft-implemented in February 2024, we

• Is there a list of Zoho Icons?

  Is there a list of Zoho Icons you can reference: i.e. business-gold is <image marginRight='7px' color='#2A70E7' bgColor='#FFFFFF' width='52px' height='52px' type='icon' value='business-gold' size='24px' cornerRadius='26px' iconType='solid' /> Thanks!

• Item images

  Can we get an "On hover" expanded image for items please ?

• Ability to Create and Manage YouTube Video Chapters in Zoho Social

  Hi Zoho Social Team, How are you? We would like to request an enhancement to Zoho Social that would allow users to create and manage YouTube video chapters directly within the platform. Currently, Zoho Social does not support manually adding chapters

• What happens to my current site SEO if i opt for zoho creator?

  I have an existing website and I need to use Zoho creators for the rapid creation of my webpage creation. Currently, my IT team is creating the web pages, but I am concerned about the SEO of my current website if I shift to zoho will i loose it all?

• Preview Emails with Merge Fields before sending

  Hello, Are there plans to preview an email with merge fields before sending out? Currently, all you see in the preview are the merge field values, but before I send out the email I want to make sure the merge is working. Also, the saved emails only show

• User Filter not selecting All Items

  We are encountering 2 issues when using the user filter. When users are trying to search using the filter option, the OK button is grayed out. Users have to unselect or make a change before it filters properly. 2. When filtering and the OK button works,

• Support Nested JavaScript Variables in PageSense Pop-up Targeting

  Hello Zoho PageSense Team, I hope you're doing well. I’d like to request a feature enhancement for the PageSense pop-up targeting functionality. Current Limitation: Currently, PageSense pop-ups can be triggered using simple JavaScript variables. However,

• Cannot Invert Axis for Rankings

  Hi there I want to be able to create a ranking graph in Analytics/BI, with 1 at the top of the Y axis, but I am unable to invert the axis. Super simple example in Excel below. Higher rankings need to be higher up on the graph to give the correct visual

• How to copy value from a single line field into a picklist field within a module's subform?

  Hello there, I have a single line field in a module's subform. I would like the value in the field to automatically update a picklist field within the same subform (both have items with the same names). Is this possible via function? Unfortunately, workflows

• Committed Stock and To Be Received Stock via API?

  Is it possible to retrieve Committed Stock and/or To Be Received Stock for an Item via the API? I want to use this information for calculating the amount of inventory needed to be purchased.

• Next Page