Vendor Payment Terms

Use Vendor Payment Terms to specify terms for payments you make to Material, Subcontractor and Other Cost accounts.

HINT-- Goldenseal accounting software uses Vendor Terms for invoices and accounts payable.

VENDOR PAYMENT TERM BASICS
Entering Vendor Payment Terms | Data Fields
Retainage | Using Lists | Using Vendor Payment Terms

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Accounting Software | Accounts Payable Software | Expense Tracking Software

Entering Vendor Payment Terms

To enter a Vendor Payment Term, follow these steps:

Choose Payment Terms from the Options menu, then choose Vendors from the submenu.
Click the New button, or click on an existing item and click the Edit button.
Enter details for the terms.

Data Fields

Enter the following information for each Vendor Payment Term:

Name-- Type in a brief name for these payment terms. This is the text that will appear in clairvoyant fields.
Comments-- Type in any comments you'd like to make about this item.
Billing Period-- Choose a billing period for when payments are due.
Payment Due-- Enter the date when payments are due. Use the pop-up menu to determine how the due date is figured. If you select "days after bill date", the due date will be set as the entered number of days after the billing date. If you choose "th of the month", the due date will occur on the entered date that next follows the billing date.
Mail Time-- Enter the number of days you need to allow for the payment to arrive.
Retainage-- If you "hold back" some of the payments for this vendor until all work is completed, enter the retainage percentage here.
Discount-- If you receive an early payment discount, enter the discount percentage to be used. Use the pop-up menu to determine how the discount expiration date is figured. If you select "days after bill date", the expiration date will be set as the entered number of days after the billing date. If you choose "th of the month", the expiration date will occur on the entered date each month.
Late Charge-- If you are charged interest or penalties on late payments, enter the percentage interest rate that you pay. If there is a minimum interest charge, enter it also.
One Month Maximum Charge-- Turn on the checkbox if you add finance charges to vendor invoices each month. Only the latest month's finance charge will be added to each bill. Turn the the checkbox off if you want the finance charge to cover the entire overdue period.
Base Date-- Enter a "starter" date for computing billing dates. The base date can be in any year.
Payment Dates-- Goldenseal automatically displays a listing of billing dates for this year. For most billing periods, you can't change the table. For custom billing periods, you can enter any billing dates into the table.

Retainage

Enter a retainage amount if you "hold back" some of the payment to a vendor.

When you use retainage, you will pay a portion of each bill when it is due. You'll pay the remainder upon completion of a project, or at some other milestone.

HINT-- You can also deduct retainage from project bills.

Setting up Retainage

To use retainage, set up one or more sets of Vendor Payment Terms that have a percentage amount in the Retainage field.

If you usually use retainage with some vendors, follow these steps:

Choose Material Suppliers, Subcontractors or Other Costs from the Accounts menu.
Locate the account that uses retainage.
Click in the Payment Terms field, and enter one of the terms that has retainage.
Repeat steps 2 and 3 for each account that uses retainage.
When you enter expenses from these vendors, they will start out with retainage.

Calculating Retainage on Invoices

To deduct retainage from subcontractor invoices, follow these steps:

Choose Subcontractor Costs from the Costs menu.
Click the New button, or choose New Record from the Edit menu.
Enter details for the invoice.
If the Payment Terms field doesn't already show terms that include retainage, click in the field and enter a set of terms that does.
You'll see the retainage amount in the Retainage field (calculated).

Goldenseal does not include a Retainage field in Material Purchases or Other Cost transactions-- since retainage is used less frequently for those transactions. If you would like to deduct retainage from them, follow these steps:

Choose Custom Layouts from the Options menu, and choose Transactions from the submenu.
Enter Material Purchases into the Transaction popup at upper left.
Click on the field tool.
Drag in the layout at the place where you'd like to add a Retainage field.
You'll see a list of fields. Choose Retainage, and click OK.

Viewing Retainage Balance

To see the amount of retainage currently owed to a subcontractor, follow these steps:

Choose Subcontractors from the Accounts menu.
Locate the account you'd like to see.
Check the Retainage Balance field at lower right.

HINT-- Goldenseal does not include retainage in the regular Payables balance for each vendor-- so the total amount you owe to the vendor is the Payables amount plus the Retainage amount.

Paying Retainage

To pay retainage to a subcontractor, follow these steps:

Choose Subcontractor Costs from the Costs menu.
Click the New button, or choose New Record from the Edit menu.
Enter the account and other details.
Enter Retainage Balance into the Apply to popup field.
Pay the bill immediately with an instant payment, or pay it later with the Pay Bills command-- just like any other invoice.

HINT-- When you close the transaction, Goldenseal reduces the Retainage balance for the vendor, and increases their Payables balance.

Using Vendor Payment Terms

Assign Loan payment terms to each Material Supplier, Subcontractor and Other Costs account.

Goldenseal enters the usual payment terms into Material Purchases, Subcontractor Costs and Other Costs. You can always change the terms for any transaction, if it is different than the usual ones.

When you use the Pay Bills command to pay vendors, Goldenseal uses the terms to determine which invoices are due or overdue. It also uses them to calculate retainage, early payment discounts and finance charges.