What are payment terms?
Payment terms define how and when you’ll pay your vendors. These terms help automate forecasting and payment scheduling, ensuring that obligations are met on time and that cash flow is accurately projected.
Each payment term consists of three key components:
Term type: The nature of the payment (e.g., Deposit, Net 30, Receipt).
Percentage: The portion of the total PO amount that this term represents. The sum of all term percentages must equal 100%.
Trigger days: The number of days after the PO issue date when the payment becomes due.
Properly configuring payment terms ensures more accurate accounting, reduces manual errors, and enables reliable forecasting.
How to set up payment terms in Settle
You can set payment terms either on the vendor profile or directly during purchase order (PO) creation.
Option 1: Setting terms on the vendor profile (Recommended)
This approach saves time and ensures consistency across all future POs with the same vendor.
Steps:
Navigate to the vendor page in Settle.
Open the vendor drawer by selecting the vendor.
In the payment terms trigger section, enter the number of trigger days and the trigger event (e.g., from PO issue date or receipt).
In the payment terms section, add term types and percentages (e.g., 30% Deposit, 70% Net 30).
Ensure that the total of all term percentages equals 100%.
Save changes—these terms will automatically populate in all future POs with this vendor.
Option 2: Setting terms during PO creation
If a vendor doesn't have saved payment terms, you’ll be prompted to define them while creating a PO.
Steps:
Click create new PO and select the vendor.
Fill in all PO details, including line items with quantities and amounts.
When no saved terms exist, a modal will prompt you to set payment terms and lead time.
In the modal:
Add trigger days and the associated event.
Add term types and percentages (must total 100%).
Choose to:
Apply changes to vendor: Saves these terms for future POs.
Keep PO-specific: Applies terms to this PO only.
Forecasting payment schedules
Once payment terms are set, Settle can automatically generate a payment forecast that outlines when payments should be made and for how much.
Creating a forecast
Complete the PO with all line items and configured payment terms.
In the Forecast section, click finish forecast setup.
Review the forecast data:
Trigger days and events: Pulled from payment terms.
Term types and percentages: Match your configured terms.
Calculated payment dates: Based on the PO issue date + trigger days and term days.
Amounts: Automatically calculated using the PO total and term percentages.
Adjust if needed:
Override individual dates by clicking the date fields.
Adjust amounts (percentages should still add to 100%).
Optional: Check “Make default for Vendor” to apply this structure to future POs with the same vendor.
💡 Note on forecast calculation logic:
If no custom date is entered, Settle uses:
PO issue date + trigger days + term days = Payment date
If a date is manually entered, that date takes precedence.
Working with suggested payments
Once forecasts are created, Settle automatically generates Suggested Payments. These are not actual payments but rather pre-filled templates and reminders based on your forecast.
Why use suggested payments?
Reduces manual data entry
Prevents late or missed payments
Keeps vendor payments aligned with POs and forecasts
Actions you can take:
1. Proceed with suggested payment
Use when: You're ready to pay on schedule.
Steps:
Click “Proceed with Suggested Payment”
Review vendor, amount, and date
Choose a payment method and pay from account
Optionally update the payment reason
Schedule the payment
Result: Payment is scheduled, linked to the correct term, and shown in the PO and balance table.
2. Mark as paid externally
Use when: Payment was made outside Settle (e.g., check, manual wire).
Steps:
Click “Mark as Paid Externally”
Select the payment term this fulfills
Confirm amount, method, and payment date
Result: An external payment record is created and linked.
3. Link existing payment
Use when: A payment already exists in Settle and needs to be tied to a payment term.
Steps:
Click “Link Existing Payment”
Select the relevant payment
Result: The payment becomes associated with the forecasted term and updates the balance.
4. Dismiss
Use when: The suggested payment is no longer needed.
Note: This action is irreversible and does not affect your financial records.
Understanding the balance table
Settle provides a live balance table on every PO to help you track what has been paid, what’s due, and what’s scheduled.
Metric | Description |
Total amount | Sum of all PO line items (Qty × Unit Price) |
Remaining balance | Amount still owed and not yet scheduled |
Vendor received | Total amount already paid to the vendor |
Due to vendor | Total outstanding balance (scheduled + unscheduled) |
Due to Settle | Scheduled payments not yet executed |
Balance examples:
New PO: All $10,000 is in remaining balance
After $3,000 is scheduled: $3,000 in due to Settle, $7,000 remaining
After $3,000 is paid: $3,000 in vendor received, $7,000 in remaining
Managing payment display on the PO
Show payment terms toggle:
ON: Payment terms appear on the PO PDF for vendor visibility
OFF: Terms are hidden from the vendor-facing document
If toggled ON and no terms exist, a modal will prompt you to create them.
You can edit terms from the PO and choose to:
Save to vendor (applies to future POs)
Keep PO-specific
Vendor payments and payment organization
Vendor payments section
Displays all payments made to the PO’s primary vendor
Clearly labeled with status (scheduled, paid, external)
Links directly to the associated payment term
Other payments section
Rarely used; captures payments to vendors not associated with the PO
Integration with Cash Flow forecasting
All forecasted payments appear in your cash outflow graph
Real-time updates when:
Forecasts are adjusted
Suggested payments are scheduled or marked as paid
Payments are categorized as “Expected payments from POs”
Final workflow summary
Set up payment terms (on the vendor profile or PO)
Create a forecast to define when and how much to pay
Review and act on suggested payments
Track vendor obligations in the balance table and payment sections
Monitor cash flow impact with real-time forecast integration
If you have any questions or require assistance, please contact our support team at support@settle.co