Payment terms is the general commercial name for what the main entry describes as supplier-payment terms: the conditions, agreed between a seller and a buyer, that state when an invoice falls due, in what currency and by what method it is to be paid, and what happens if payment is early or late. The main entry sets out the common forms and how they are negotiated.
The phrase is used from both sides of a transaction. A seller speaks of the terms it offers customers, which determine how long its accounts receivable remain outstanding; a buyer speaks of the terms it obtains from suppliers, which govern its accounts payable. Typical expressions include payment in advance, cash on delivery, and net periods such as thirty or sixty days from the invoice date, sometimes with an early payment discount.
In international trade the term also covers the choice of settlement method, ranging from open account to documentary collection and the letter of credit, each of which allocates risk differently between exporter and importer. In loan and bond documentation, payment terms refers to the schedule of interest and principal instead, and the payment date of a security has its own meaning.