DEFINITION
Payment terms say when and how the buyer pays. "Net 30" means the full amount is due 30 days after the invoice date; "Net 30 end of month" moves the start to the end of the invoice's month. In electronics trading, split terms are common: for example 30% in advance and 70% before shipment, or the balance against documents.
Terms decide your cash flow and your risk. Selling on credit to a new customer exposes you if it does not pay; buying with an advance exposes you if the goods do not come. That is why terms are usually tightened for new partners and relaxed as the relationship builds, often backed by a credit limit.
The terms belong in the order confirmation and on the invoice, together with the due date they produce.
HOW KOLIBRA HELPS
In Kolibra each deal's terms become payment milestones with real due dates, overdue amounts show on the dashboard, and the Payment Terms tool calculates due dates from document dates.