Payment Terms - What do Net 30, CWO, and PIA mean?

   Explaining Net 30, CWO and PIA Payment Terms and How to use them

     When it comes to payment terms, there are a lot of options out there. Depending on the type of business you're in, your customer may have preferences for how they want to pay you. Here's a breakdown of some common payment terms with an explanation of what they mean:

Net 30

      As stated above, Net 30 is the percentage of your invoice that you have to pay within 30 days. This is a good payment term for both buyers and sellers as it helps keep cash flow in check and can make cash flow management easier for both parties.

   In the case of buyers, Net 30 allows them to take advantage of opportunities that come up during their payment window without having to worry about falling behind on account payments. For example, if a buyer finds a supplier with great pricing or discovers an opportunity to negotiate better terms with their current supplier (e.g., longer payment terms), they can easily do so since they don't need all of the money right away just yet (they still have 30 days).

     In the case of sellers, Net 30 helps them manage their own cash flow more effectively which means less stress when managing accounts receivable (AR). Basically, this allows sellers who accept Net 30 payments more flexibility when deciding how much money they want back from their customers upfront versus waiting until after selling their product/service first before collecting any funds owed by clients/customers - especially since some companies use AR as part of their business model.

Cash with Order (CWO)

   Cash with Order (CWO) is a payment term used in the supply chain industry. This means that the buyer pays for the goods when they are ordered and not at delivery or on receipt of an invoice.

   CWO is often used by suppliers who want to reduce their risk by receiving cash before committing to manufacturing or delivering products. As such, it is commonly found within B2B transactions where one party has greater bargaining power than another, such as between manufacturers and retailers or wholesalers and distributors.

Cash Before Shipment (CBS)

      The seller ships the goods and does not receive payment until a later date. The seller must be able to afford to ship and send the goods without receiving payment first. The buyer will then pay the seller when they receive the goods

    CBS is frequently used for large transactions where there is high credit risk associated with both parties, especially if one party has a poor track record of paying their bills on time.

Cash on Delivery (COD)

    Cash on delivery (COD) is a method of payment for goods where the buyer pays for the goods when they are delivered. COD payments are always made in cash, but there may be some exceptions (such as checks).

    In order to accept COD payments, you must accept all risks associated with collecting payments from your customers. In other words, if an item is damaged or lost during transit, you will be responsible for paying for it and cannot seek reimbursement from your customer or carrier.

   In order to accept a COD shipment, these are the payment options:

Payment in Advance (PIA)

    Payment in Advance (PIA), also known as “pay-as-you-go” or “pay as you use,” is a payment method that allows you to defer your payments until the end of the month. This means that if you don't use all your credits for one month, they won't be lost; instead, they will accumulate and can be used in future months.

    For example, if you have an agreement of $100 per month with your supplier but only spend $70 one month, then any remaining credits will still be available for use next month. In this case, it would mean that after 3 months you could have accumulated $210 worth of credit even though only $100 has been paid so far. PIA is often used by companies that are new to their industry or those who have seasonal fluctuations where they do not know how much business they'll need each month; this enables them to manage their cash flow more easily as well as keep track of how much money is owed from past transactions which may need paying back at some point in future weeks/months/years.

Payment on Receipt of Invoice (PORI)

    PORI is a payment term that requires the customer to make their payment only after they receive the invoice in their inboxes. The invoice sent by your company must include items such as the title, description, price, and quantity of the item purchased.

     This is one of the most common payment terms used by many businesses today because it allows you to be paid immediately after you send out an invoice. This option can also be combined with any other payment method that you may have in mind. For instance, if you set up a PORI/wire transfer policy for your customers then it will mean that they have no choice but to pay through wire transfers in order to get their invoices paid on time.

Deferred Payment/Installment Payments

   Deferred payment is a payment plan in which the buyer pays the seller in installments. The buyer usually pays up to three installments, but this can vary from one to six or more payments. Installment payments are payments that are made over time and paid at regular intervals, usually each month. Installment plans are often used to pay for goods and services on credit such as furniture or electronics and sometimes even rent, utilities or mortgages.

    Installment payments are usually paid by credit card (CC), which means that the transaction is processed electronically and takes place immediately after it has been authorized by your bank or financial institution; however, you can also make an installment payment with cash at point-of-sale (POS) terminals found in stores where these types of goods/services are sold if they accept cash payments instead of only taking CCs.

Understanding Payment Terms: Tips and Takeaways

  · Once you understand the basics of how payment terms work, you can make sure that you're getting what's best for your business.

  · If a customer is offering Net 30 and is asking for an invoice from you, that means they want to pay within 30 days of receiving their invoice. They're telling you in advance that they aren't going to pay until then but it's up to them when they do so. It's not something that needs to be negotiated, you simply send out invoices as normal and let them know this is how long they have before your invoice will be due and payable.

  · The same applies with CWO: if it's been accepted by both parties (this may require some legwork on their part), then payments should happen on time or earlier depending on which one of CWO or Net 30 applies. If there are any issues with payments being made on time, see what options are available such as late fees or interest charges, these could help speed things up.

     The key takeaway from this article is that there are a wide variety of payment terms out there and it’s important to understand what they mean. The most common ones are Net 30, CWO, and CBS but PORI, COD, and PIA can also be used.