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. 

    • 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 People Attendance Regularization – Wrong Total Hours Displayed

      While using Zoho People, I observed that the attendance regularization is showing wrong total hours when applied to past dates. For example, if a check-in is added at 10:00 AM and check-out at 6:00 PM for a previous date, the system sometimes calculates

    • Add Flexible Recurrence Options for Meeting Scheduling in Zoho Cliq (e.g., Every 2 Weeks)

      Hello Zoho Cliq Team, We hope you are doing well. Currently, when scheduling a meeting inside Zoho Cliq, the recurrence options are limited to Daily, Weekly, Monthly, and Yearly. There is no ability to set a meeting to occur every X weeks — for example,

    • Subform Disabled Fields Should Remain Disabled on Edit/View

      Currently, when we disable a subform field using on user input or on add new row, it works perfectly during the initial data entry. However, when the record is saved and reopened for viewing or editing, these disabled fields become editable again. This

    • Hide "Section" headers when using a form as a subform in "List view"

      When using a form as a subform and setting the "View Type" to "List View" it is not possible to hide the section headers. This can become an issue if I have a section which is not applicable to this subform and I hide the fields within that section and

    • Add additional field to quick search results

      IN the advanced search, we can add any field to the columns. In the regular search results (before you press enter, there is no option to modify the results. It would be super useful to include a custom field where it currently displays the pipleine

    • Need Help: Updating Related Records via Subform Entries in Zoho Creator

      Hi everyone, I’m trying to set up a workflow in Zoho Creator where each row in a subform updates related records in another form automatically. Here’s the situation: My main form (e.g., “Receipts”) contains a subform where each row selects a related record

    • Disable signing in using email aliases?

      Hi, I currently have user accounts that have multiple aliases, for example: Main: name@domain.com Alias: alias1@domain.com, alias2@domain.com Currently, I am able to use any of those 3 emails in the 'username' box during login, and it will log me into the email. Is there a way to setup so that email aliases cannot be used to sign on? I'd still be able to receive and send emails using those aliases in the main email account like it works now, except only the main email can be used to login. Cheers!

    • Zoho Desk - Community - Customer Portal - Description Field UX Improvement

      Hi Zoho Desk Team, As a prolific user of Zoho Cares Community, I find it very frustrating that I cannot increase the size of the Description box (this one which I am typing this message). Many apps with multi line text fields have a small handle in the

    • Add the same FROM email to multiple department

      Hi, We have several agents who work with multiple departments and we'd like to be able to select their names on the FROM field (sender), but apparently it's not possible to add a FROM address to multiple departments. Is there any way around this? Thanks.

    • Lead to Contact Conversion with multiple email address fields

      We are a B2C business with a strong repeat cycle, and as such it's not uncommon for customers to use multiple email addresses with us. We have both our Contacts & Leads modules set up with 3 email fields. (Primary Email / Secondary Email / Historic Email)

    • Exporting Charts from ZohoCRM

      Hi...I'm relatively new to ZohoCRM, but very happy with it so far. I have all my leads and potentials accurately entered, and like the reports that I can view, with charts at the top of the data. But when I export the data, I'm receiving only the data, whether I export as excel, csv or pdf. How can I export both the chart and the data? In case it makes a difference, I'm using the free version right now. I tried researching the other editions to see if a paid version of the software offered the ability

    • sms long credits

      I’m trying to purchase Long Code credits so I can send SMS campaigns to my contacts. However, when I click the “Buy Now” button, the page appears blank and doesn’t load any purchase options. Could you please assist me in purchasing the Long Code credits

    • Tip #48- Power Your AI Workflows with Zoho Assist on Zapier’s MCP- 'Insider Insights'

      We’re thrilled to announce that Zoho Assist is now part of Zapier’s Model Context Protocol (MCP), bringing remote support automation right into your AI ecosystem. What is MCP? The Model Context Protocol (MCP) is Zapier’s new framework designed to connect

    • Insert Cookie Policy in Zoho Sites

      Hello, i need to insert a banner on my site because i'm in Italy so i have to respect EU laws for Cookie Policy and Privacy Policy. I see that i need to insert a code in <head> section of my site to show a banner/popup with cookie info. How i can do this? Thank you Luca

    • Forced Logouts - Daily and More Frequent

      In the last month or so, I've been getting "power logged out" of all of my Zoho apps at least daily, sometimes more frequently. This happens in the same browser session on the same computer, and I need to re-login to each app separately after this happens.

    • ENTER key triggering Submit

      Is it possible to stopped the ENTER key from the mandatory triggering of the Submit button on Creator form? I want forms submitted "ONLY" when the Submit button is pressed. 

    • Is it possible to assign Client user to external task ON PROJECTS' TEMPLATES?

      Is it possible to assign Client user to external task ON TEMPLATES PROJECTS?

    • Link to images

      I have added images in pages. I would like to link those images with linked in URL so that they open in new window. There is an option of image -> link but I am not able to use the same to open URL in new window. Please check the attached image. Can you

    • Respond faster and smarter with Zia in your IM Inbox

      You’re in the middle of a busy chat queue. New messages keep popping up. One customer sounds upset. Another is asking a long list of questions. You need context. You need speed. You need help. That’s exactly when Zia Insghts jumps into action. It shows

    • WARNING : Smart list automatically unsubscribes your contacts.

      I created a smart list of my team members based on the criterion that their email domain was @_____. The list refreshed as expected — but it ended up unsubscribing almost all members of my team. I contacted support, but it took two months to get a reply,

    • 5名限定 課題解決型ワークショップイベント Zoho ワークアウト開催のお知らせ (10/31)

      ユーザーの皆さま、こんにちは。Zoho ユーザーコミュニティチームの中野です。 10月開催のZoho ワークアウトについてお知らせします。 今回はZoomにて、オンライン開催します。 参加登録はこちら（無料）：https://us02web.zoom.us/meeting/register/BGYTysOnSqa9LA9eY2IKww ━━━━━━━━━━━━━━━━━━━━━━━━ Zoho ワークアウトとは？ Zoho ユーザー同士で交流しながら、サービスに関する疑問や不明点の解消を目的とした

    • Subforms in Stateless Forms

      Stateless Forms are very useful, but we can't build complex data entry pages without Subforms. Can this be implemented? This would make Stateless Forms truly powerful.

    • Custom Function not getting package details when triggered from Workflow Rules.

      I have a custom function for Packages that submits a form in our Creator app that we use to generate custom shipping labels (internal staff complete deliveries so we cannot generate shipping labels straight from Inventory). When the function is executed

    • Billing Preferences per Account

      Hello, We are trying to setup Billing Preferences in Zoho Desk to set up a different pricing per account. We charge different pricing per hour per customer/account. Account A = 100 per hour Account B = 125 per hour In the Billing Preferences in Time Entry

    • Time entry preview for custom time entry templates.

      Our company needed time entries in a specific format to document our client interactions. Since we are using a custom time entry layout, we have lost the "preview" on the time entry tab. Using the default time entry layout, you get a small preview of

    • Able to change project on timelog entries

      Ability to move the timesheet entry from one project to another. When a user adds a wrong entry a manager can change/update the timesheet entry to the correct project.

    • Introducing swipe actions in the Zoho CRM Android app

      Hello everyone, How much time do you spend each day on your list view? Probably quite a lot. Since it's such an important part of your work, wouldn't it be easier if you could take action directly from your list view instead of opening each record one

    • Content Security Policy

      Is there a place in ZOHO CRM to add a Content Security Policy to allow for a call to a google.com map, from inside our current app? Or, how do I resolve the issue below?? jquery.js:1 Refused to load the script 'https://maps.google.com/maps/api/js?v=3.41&libraries=places&sensor=true&key=AIzaSyAyQzKeKSbLci4LwZhn9oXvtCkbUo1Ae4g&callback=map_loader'

    • Option to select location?

      As a business coach, I meet with clients at various public locations. I have two or three pre-determined locations that I meet at. I would like the client to choose the location when booking an appointment. Is there a way to do that with a single service, or is the best way to accomplish this by creating one service for each location offered?

    • Provide a standard structure to your content using article templates

      Hello everyone, When multiple writers work on different documents, maintaining a standard structure can be challenging as each of the writer follows a different writing style. However, when the structure, tone, and format of every document is different,

    • Accessibility Spotlight Series - 1

      Every user interacts with products differently, what feels intuitive to one may be challenging for another. Addressing this, accessibility is built into Zoho Project's design philosophy. This helps users navigate and perform actions with ease irrespective

    • Projects Tasks Not Showing Dependencies

      I'm clicking on tasks and the popup to add dependencies isn't showing. I can't disconnect the nodes either. For some reason when I slide a task backwards it says it cannot go before a predecessor, even though there is not predecessor. Double clicking

    • Deprecation of C4 endpoint URLs

      Note: This post is only for users who are still using the C4 endpoints. Hello everyone, At Zoho Creator, we're committed to continuously enhancing the security, performance, and capabilities of our platform. As part of this ongoing effort, we'll be deprecating

    • Introducing AWS authentication for connections in Deluge

      Hello everyone, We're incredibly excited to announce the all-new AWS authentication for connections in Deluge! This highly anticipated feature simplifies connecting to Amazon Web Services, opening up a world of possibilities and allowing you to seamlessly

    • Customize User Invites with Invitation Templates

      Invitation Templates help streamline the invitation process by allowing users to create customized email formats instead of sending a one-size-fits-all email. Different invitation templates can be created for portal users and client users to align with

    • ListObjects is recognized by VBA

      Sub addNewRow() Dim ws As Worksheet ' Set your worksheet name Set ws = ThisWorkbook.Sheets("Invoice") ' Set your table name (change "Table1" to your actual table name) ws.ListObjects("InvItems").ListRows.Add End Sub I am getting Unknown function: Li

    • KPI Widget dashboard select periods

      I have a problem with selecting periods as a user filter. In the beste scenario I would like to have to have a period filter like Google Analytics has of Datastudio (see attachment). In the KPI widget I "Group by "inquiry_date" on week&Year". It selects

    • Need a way to secure Prefill URLs in Zoho Forms (hide or encrypt prefilled values)

      Hi everyone, I often use Zoho Forms with prefilled URLs to simplify the user experience — for example: https://forms.zohopublic.com/.../form?Name=David&Amount=300 However, the problem is that all prefilled values are visible and editable in the link.

    • Can’t send emails from Zoho CRM after adding a new user — verification codes not received

      Hi everyone, We recently added a new user to our Zoho CRM account and purchased an additional license. Since then, we haven’t been able to send any emails from Zoho CRM. Our Zoho Mail accounts are working perfectly, we can send and receive emails directly

    • CRM for email in Outlook: how to ignore addresses?

      We’re using the "Zoho CRM for email" add-in for Outlook. When opening an email, the add-in displays all email addresses from the message and allows me to add them to the CRM or shows if they’re already contacts. However, sometimes people listed in To

    • Next Page