## Documentation Index

Access the complete documentation index at:
https://www.zoho.com/in/books/help/llms.txt

Use this file to discover all available documentation pages before proceeding.

# Payment Terms

Payment terms are agreements between customers or vendors on how and when a business should be paid for the goods and services they provide. They determine when payments are due for sales and purchase transactions, and businesses can use different payment terms based on their requirements.

Zoho Books provides default payment terms such as **Due end of the month** and **Due end of next month**. You can also create custom payment terms and associate them with customers, vendors, or transactions. This helps you apply due dates consistently and manage payment terms from one place.

## Create Payment Terms

To create a new payment term:

*   Go to **Settings**.
*   Under _Organisation Settings_, navigate to _Setup & Configurations_ and select **Payment Terms**.
*   Click **\+ New Payment Term** in the top right corner.

![Payment Terms Settings Page](/books/help/images/settings/payment-terms/payment-terms-settings.png)

*   Enter the **Term Name**.
*   Enter the number of days next to **Due After**.

![New Payment Term](/in/books/help/images/settings/payment-terms/new-payment-term-in.png)

*   Click **Save**.

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## Apply Payment Terms to Transactions

**Scenario:** Patricia, an accounts manager, works with retail clients who have different payment agreements. To accommodate these varying payment schedules, she creates custom payment terms such as Net 20, Net 75, and Net 90 in Zoho Books. While creating invoices, she selects the relevant payment term, ensuring that due dates align with agreed payment timelines and helping her team manage collections more effectively.

To associate a payment term to an invoice:

*   Go to _Sales_ on the left sidebar and select **Invoices**.
*   Click **\+ New** in the top right corner of the page. Or, select the existing invoice for which you want to update the payment term and click **Edit**.
*   Fill the required details.
*   From the **Terms** dropdown, select the payment term you want to apply to this invoice. Or, click **\+ New Payment Term** to create a new payment term.

![Invoice Terms Dropdown](/in/books/help/images/settings/payment-terms/invoice-terms-dropdown-in.png)

*   Click **Save and Send**.

To update payment terms for multiple existing invoices in bulk:

*   Go to _Sales_ on the left sidebar and select **Invoices**.
*   Select the invoices whose payment terms you want to update.
*   Click **Bulk Update** on the top bar.

![Invoices Bulk Update](/in/books/help/images/settings/payment-terms/invoices-bulk-update-in.png)

*   From the **Select a field** dropdown, select **Payment Terms**, then select the payment term you want to apply.
*   Enter a reason for performing the bulk update.
*   Click **Update**.

Similarly, you can apply payment terms to other sales and purchase transactions while creating, editing, or bulk updating them.

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## Associate Payment Term to Customers and Vendors

**Scenario:** Daniel, a finance executive at a consulting firm with over 50 active clients, manages recurring invoices for customers with agreed payment schedules. Instead of manually selecting a payment term for every invoice, he associates the appropriate payment term with each customer in Zoho Books. As a result, new invoices automatically use the correct due date, reducing manual work and minimising billing errors.

To associate a payment term with a customer or vendor:

*   Go to _Sales_ on the left sidebar and select **Customers**. Or, go to **Purchases** on the left sidebar and select **Vendors**.
*   Click **\+ New** in the top right corner of the page. Or, select the existing customer or vendor for whom you want to update the payment term and click **Edit**.
*   Fill the required details.
*   In the **Payment Terms** field, select the payment term you want to associate. Or, click **New Payment Term** to create a new payment term.
*   Click **Save**.

Once associated, the selected payment term will be automatically applied to new transactions created for that customer or vendor.

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## Edit Payment Term

To edit an existing payment term:

*   Go to **Settings**.
*   Under _Organisation Settings_, navigate to _Setup & Configurations_ and select **Payment Terms**.
*   Hover over the payment term you want to edit.
*   Click the **More** icon.
*   Select **Edit**.

![Edit Payment Term](/books/help/images/settings/payment-terms/edit-payment-term.png)

*   Make the required changes.
*   Click **Save**.

The updated payment term will be applied to future transactions.

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## Set as Default

When you set a payment term as default, it is automatically applied to all new transactions, customers, and vendors.

To set a payment term as the default:

*   Go to **Settings**.
*   Under _Organisation Settings_, navigate to _Setup & Configurations_ and select **Payment Terms**.
*   Hover over the payment term you want to set as default.
*   Click the **More** icon.
*   Select **Set As Default**.

![Set as Default Payment Term](/books/help/images/settings/payment-terms/set-default-payment-term.png)

The payment term will be set as default. You can still select a different payment term when creating or editing individual transactions.

**Note:** Default payment terms cannot be deleted or marked as inactive. You can only edit them. To delete or mark a payment term as inactive, set a different payment term as the default first.

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## Mark as Inactive Or Active

To mark a payment term as inactive:

*   Go to **Settings**.
*   Under _Organisation Settings_, navigate to _Setup & Configurations_ and select **Payment Terms**.
*   Hover over the payment term you want to mark as inactive.
*   Click the **More** icon.
*   Select **Mark as Inactive**.

![Mark as Inactive Payment Term](/books/help/images/settings/payment-terms/mark-inactive-payment-term.png)

The payment term will be marked as inactive and you cannot associate it with customers or apply it to transactions in the future. Existing transactions using this term will remain unchanged.

To mark an inactive term as active again:

*   Go to **Settings**.
*   Under _Organisation Settings_, navigate to _Setup & Configurations_ and select **Payment Terms**.
*   Hover over the payment term you want to mark as active.
*   Click the **More** icon.
*   Select **Mark as Active**.

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## Delete Payment Term

To delete an existing payment term:

*   Go to **Settings**.
*   Under _Organisation Settings_, navigate to _Setup & Configurations_ and select **Payment Terms**.
*   Hover over the payment term you want to delete.
*   Click the **More** icon.
*   Select **Delete**.

![Delete Payment Term](/books/help/images/settings/payment-terms/delete-payment-term.png)

*   In the confirmation pop-up, click **Delete** again.

**Note:** You cannot delete a payment term associated with a customer or vendor. Dissociate the payment term before deleting it.