When AP Meets Common Sense: Discounting and Payment Terms (Part 1) [PRO]

When I first came across “payment terms” outside of a classroom setting it was in Japan in the ‘90s. I must admit, from my vantage point in domestic (domestic Japanese, that is) sales engineering activities, I found it rather confusing. As I recall (translated of course), the terms given to us, a Tier 1 supplier to a leading Japanese manufacturer, went along these lines: “50% of the amount owed will be paid in cash two months after the end of the month following the month the invoice is presented and the balance will be paid 3 months after that.” Try telling that to a typical payables clerk in the US to have them explain to suppliers.

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