Let's say that you recently negotiated a sale (congratulations!), and your customer snagged some extended payment terms with you as part of the deal.
So, instead of paying you in your normal net 30 day terms, they are going to pay you with net 45 day terms (hopefully your profit margin covers this extra financing term!)
You go to create the invoice in QuickBooks, and quickly see there is no "net 45" day term in the list. So, you click the Add New option, and create the new terms that look like this:
All seems to be good at this point, right?
THE AGING REPORT TELLS YOU SOMETHING DIFFERENT
Next week, you do a quick rundown of your accounts receivable aging report, and you see the invoice to this customer showing as overdue. Say what?
There is no way it is overdue at this point!
Well, QuickBooks thinks something different about it than you do.
HOW TO SET UP THE PAYMENT TERMS PROPERLY
QuickBooks would indeed show you the correct aging of this invoice - if you had done one additional thing when you set up the terms above.
And here is the thing:
In the original box above, the "net due in" was not changed from 0 to 45 days. So, QuickBooks would see this invoice overdue on the very first day you sent it, even though the terms "net 45" appeared on the invoice.
In the updated box below, the "net due in" is correctly set up to match the applicable terms.
Once you get in and reset the definition of the payment terms (quick shortcut to access them - click Lists > Customer and Vendor Profile Lists > Terms List). QuickBooks will then properly age the invoice on your reports!