What is Credit Terms?
Credit terms are the conditions on which goods are sold on credit, mainly the number of days allowed before payment is due and any limit or discount for early payment.
Updated
Meaning
English
Credit terms are the conditions on which goods are sold on credit, mainly the number of days allowed before payment is due and any limit or discount for early payment.
Roman Urdu
Credit terms woh shartein hain jin par udhaar maal diya jata hai, jaise kitne din me paisa dena hai aur limit kitni hai.
Also called payment terms, credit days.
Example
A distributor gives a shop 30 days to pay and a small discount for paying in 10. The shop pays on day 9 to take the discount.
Both directions
Suppliers give you credit terms and you give them to customers. Longer terms to customers delay your cash, while longer terms from suppliers help it. Set a limit and a due date for each credit customer and follow up on the due date. See accounts receivable and accounts payable.
In Nafaa
Nafaa customers can have a credit limit, and the khata shows balances by age with WhatsApp reminders. See credit limit.
Related terms
- Accounts Receivable
Accounts receivable is the money customers owe a business for goods or services already supplied on credit.
- Accounts Payable
Accounts payable is the money a business owes its suppliers for goods or services it has received but not yet paid for.
- Udhaar
Udhaar is credit given to a customer: goods are taken now and paid for later.