How Payment Terms Are Determined for an Invoice

Overview

When an invoice enters OpenEnvoy, the system determines the invoice's payment terms (and therefore the due date) by selecting terms from a defined order of precedence, then calculating dates from those terms. If early-payment discount terms are present, OpenEnvoy also determines the early payment discount (EPD) date for visibility and filtering.

Precedence Order

Across all companies, OpenEnvoy applies the following preference order to determine payment terms:

1. Vendor master (vendor-level / vendor agreement terms)

2. Purchase Order (PO) terms

3. Invoice terms (as written on the invoice document)

The vendor master is the highest authority. If vendor master terms are not available, OpenEnvoy uses PO terms. If PO terms are also not available, it falls back to invoice terms.

What "Payment Terms" Means in OpenEnvoy

Payment terms define when an invoice is due (e.g., "Net 30", "Due upon receipt") and may include discount windows (e.g., "2/10 Net 30"). OpenEnvoy uses payment terms to:

• Calculate the invoice due date.

• Identify and compute early payment discount (EPD) dates and eligibility, when discount-bearing terms exist.

Determination Logic

Step 1: Select the Source of Truth Using Precedence

OpenEnvoy checks sources in the following order:

• Vendor master terms (if present) override everything else.

• If vendor master terms are unavailable, PO terms are used.

• If PO terms are also unavailable, the invoice's stated terms are used.

Step 2: Normalize and Interpret the Selected Terms

OpenEnvoy standardizes the chosen terms into a structured interpretation, typically including:

• The "net due" rule (final due date rule).

• Any discount rule(s), if present (discount percent and discount deadline).

Step 3: Calculate Due Date (and Discount Date, If Applicable)

• The due date is computed by applying the net due rule to the base date (commonly the invoice date). For example, "Net 30 days" means the due date is the invoice date plus 30 days.

• If the terms include an early payment discount, OpenEnvoy also computes the EPD date, which is surfaced as a column and filter in the jobs list.

Example Scenarios

Example A: Vendor Master Terms Present (Highest Priority)

Result: OpenEnvoy uses Net 45 (vendor master wins) and computes the due date accordingly.

Example B: Vendor Master Missing, PO Terms Present

Result: OpenEnvoy uses the PO's 2/10 Net 30. The due date is based on Net 30, and the EPD date uses the 2/10 discount window (available for filtering and reporting).

Example C: Vendor Master and PO Missing — Invoice Fallback

Result: OpenEnvoy uses the invoice terms and calculates the due date (e.g., invoice date + 30 days).

Where Users Can See These Results

• Jobs list: The early payment discount date appears as a column, with filters available for EPD-related analysis and missed discount opportunities.

• Job details / extracted fields: Payment term and due date are represented as invoice fields used downstream. Visibility depends on configuration and enabled columns/fields.

Notes and Edge Cases

• Payment terms can appear in multiple human-readable formats. OpenEnvoy's normalization step ensures the system can compute due dates and discount dates consistently regardless of format.

• If the invoice date is corrected during verification or editing flows, the computed due date may change because it is derived from the base date plus the chosen terms.