Commonly used invoice payment terms and their meanings

This list explains many of the terms commonly used on invoices.

Invoice payment terms

Net 7 Payment seven days after invoice date
Net 10 Payment ten days after invoice date
Net 30 Payment 30 days after invoice date
Net 60 Payment 60 days after invoice date
Net 90 Payment 90 days after invoice date
EOM End of month
21 MFI 21st of the month following invoice date
1 % 10 Net 30 1 per cent discount if payment received within ten days otherwise payment 30 days after invoice date
COD Cash on delivery
Cash account Account conducted on a cash basis, no credit
Letter of credit A documentary credit confirmed by a bank, often used for export
Bill of exchange A promise to pay at a later date, usually supported by a bank
CND Cash next delivery
CBS Cash before shipment
CIA Cash in advance
CWO Cash with order
1MD Monthly credit payment of a full month’s supply
2MD As above plus an extra calendar month
Contra Payment from the customer offset against the value of supplies purchased from the customer
Stage payment Payment of agreed amounts at stages

Many of them are working out-of-the-box in our Goodwill ERP. However in implementations we sometimes find a very unusual requirement. Like in one case, in Karawang, they sell  motorcycles with payment term “after harvesting” (what?) which means the customer will pay you after the next harvest season. Only in Indonesia, grrr…. 😀

Anyway, if you need a special treatment for your business case, let us know. We can help you.