Payment terms include all terms and conditions with regard to the payment obligations of a buyer from a sales contract as well as their payment methods . Not only sales contracts, but all contractual obligations from which payment obligations arise, contain payment regulations. This particularly applies to long-term obligations such as rental , leasing , leasing , credit , electricity supply or mobile phone contracts . Depending on the bargaining power , the payment terms are set either by the supplier or the customer . If a consumer is the customer, he must accept the supplier's terms of payment if they are within the legally permissible framework. The terms of payment have a significant influence on the purchasing and payment behavior of customers.
Payment terms supplement the delivery terms and can be combined with them to form delivery and payment terms. As a rule, both apply as general terms and conditions, because they are pre-formulated contractual conditions for a large number of contracts that the supplier presents to his customers when the contract is concluded ( BGB) . The consumer as a customer is then protected by the general terms and conditions of the BGB, so that in particular clauses that are surprising or ambiguous ( BGB) and clauses that are inappropriately disadvantageous ( (1) BGB) are ineffective and all payment terms and conditions of a judicial content control subject. Prohibited clauses are finally listed in § BGB and BGB. Of indispensable legal regulations must not be compromised at the expense of the consumer in terms of payment.(1)
If an entrepreneur grants a payment deferral to a consumer within the framework of the payment terms , this is a partial payment transaction for which the provisions for consumer loan contracts apply according to (1) BGB .
The terms of payment include, in particular, the details of bank details , payment method ( cash payment , advance payment , down payment , credit note procedure , central settlement , cash on delivery , transfer , direct debit procedure , check or electronic money , installment payment , partial payment ), due date , payment term , cash discount and discount regulations . The retention of title is a delivery condition, but it is considered to be the supplier's credit security for the granted payment term.
These terms of payment contain a ranking that affects the supplier's payment risk. Prepayment and down payment reduce the supplier's risk and are used for new customers or customers with poor credit ratings . Even products / services with high production costs (large machines , ships , airplanes , buildings ) are often financed through advance payment or payments of the customer. Step by step payments such as cash payments or cash on delivery represent an even risk sharing between supplier and customer . The highest payment risk for the supplier is installment payments and a payment term.
The supplier or creditor setting the terms of payment can thereby directly influence his liquidity . The most favorable terms of payment in advance for him improves his liquidity before he has even started production or delivery . The most unfavorable is the granting of a term of payment and represents a customer credit and thus a credit risk for the supplier . Both terms of payment are therefore associated with an advance payment risk , which is to be borne by the customer for the advance payment and by the supplier for the term of payment ( del credere risk ).
Common payment terms
A widespread payment condition is the target purchase (payment target), which occurs, for example, in the following forms as a commercial practice :
- 10 days - 3%, 30 days net (the customer can deduct a 3% discount up to ten days after the invoice date, otherwise payment is due after 30 days without deduction);
- 7 days - 2%, 20 days net ;
- immediately - 2%, 14 days net ;
- 2% on the 15th of the 2nd following month .
The value date is due to the fact that the invoice is dated ( value date) at a certain point in time after delivery. The discount period specifies until when the discount may be deducted from the invoice amount. The target period (the payment target ) specifies the latest by when the invoice amount is due without any discount. The supplier credit is granted free of charge within the value and discount period, so that it makes economic sense for the customer to pay the invoice on the last day of the discount period after deduction of the discount. If the customer is not liquid at this point in time, he can still use the so-called discount reference range (= ) and does not have to take out a bank loan to settle the bill. If the customer exceeds the agreed payment term, there is a delay period, ie a forced supplier credit. The sum of the respective periods, the duration of the envelope requirements ( English Days Sales Outstanding ) or liabilities .
According to German Civil Code ( BGB) , an agreement that provides for a payment period of more than 60 days is only permissible if it has been expressly made and is not grossly unfair with regard to the interests of the obligee . If the debtor is a public authority , the payment period may not exceed 30 days from receipt of the invoice or an equivalent payment schedule.(1) of the
International payment terms take into account the payment practices, which are similar with regard to payment systems in the European Payments Area (SEPA). In the case of international transfers , the paying customer must use the payment order form in foreign trade for his bank details , regardless of whether the SEPA or SWIFT payment system is used. In addition to the usual del credere risk, there is also an exchange rate risk ( currency risk when the importer pays in a foreign currency ) and the country risk for suppliers in foreign trade (= exporter ) . The exporter can hedge against both risks ( currency forwards for exchange rate risk, export credit insurance for country risk); The del credere risk can be covered by del credere insurance, but is often not insured.
In foreign trade finance , a distinction must be made between documentary and non-documentary payment terms:
- Documentary ( "secure") Payment ( English documentary payment modes ) are present when transporting documents ( commercial instructions such as bill of lading or bill of lading ) - the goods represent - are used and the exporter banks the importer train to train provided against payment available become. The basic forms are document collection and the letter of credit .
- non-documentary ( "unsecured") Payment ( English clean payment ) are advance ( English advance payment ) and payment ( English prepayment , down payment ), payment at or after delivery (payment).
While documentary payment terms use the peculiarities of traditional papers customary in foreign trade , the non-documentary payment terms are identical to the domestic payment terms.
- cad (c / d): Payment against documents ( English cash against documents ),
- CBD: Bank ( English cash before delivery ),
- cia: Bank ( English cash in advance ),
- cod: Payment on delivery ( English cash on delivery ),
- cos: payment upon shipment ( English cash on shipment ),
- cwo: payment instructions (in order ) ( english cash with order )
- M / P: Payment in the next month ( English Month after Payment ),
- oa: Payment against invoice ( English on account ),
- POD: Payment on delivery / delivery ( English pay on delivery ),
- TT: Telegraphic Transfer ( English Telegrafic Transfer ),
- CLC or L / C payment against Letter of Credit ( English Commercial letter of credit or English letter of credit ).
Price , product quality , customer service as well as delivery and payment conditions serve as means in competition to secure or improve one's own market position . Delivery and payment conditions are part of performance competition and, like price and quality, can also influence the purchasing decision of market participants . They are therefore instruments of marketing and sales financing . Terms of payment can promote customer loyalty , especially in the case of continuing obligations . Customer-friendly payment terms can transform walk- in customers into regular customers . (“Buy today - pay later”).
- Hermann Lauer: Conditions Management. Design and enforce payment terms optimally. Verlag Wirtschaft und Finanz, Düsseldorf 1998, ISBN 3-87881-124-1 .
- Heribert Meffert: Marketing: Basics of market-oriented corporate management , 2000, p. 593
- Clemens Büter: Foreign Trade: basics of international trade relations. 2013, p. 299
- Gabler Wirtschaftslexikon, Volume 6, 1984, Col. 2368
- Clemens Büter: Foreign trade: Basics of international trade relations , 2013, p. 300 f.
- Roland Eller / Markus Heinrich / René Perrot / Markus Reif (eds.): Compact knowledge of risk management. 2010, p. 189