What Is a Settlement Period?

Settlement cycle: refers to the length of transaction time covered by each payment calculation. Because there are a lot of frequent transactions in actual business, such as some companies implement JIT production, they have to pay many times a day, if each arrival must be settled, invoiced, and paid, which increases the cost of both parties to the transaction, it is usually agreed One settlement cycle.

Settlement cycle

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Settlement cycle: refers to the length of transaction time covered by each payment calculation. Because there are a lot of frequent transactions in actual business, such as some companies implement JIT production, they have to pay many times a day, if each arrival must be settled, invoiced, and paid, which increases the cost of both parties to the transaction, it is usually agreed One settlement cycle.

If each natural month is a settlement cycle, the delivery between October 1 and October 31 will be settled once when the October payment is settled to confirm the accounts payable and accounts payable due date; settlement The cycle is usually divided into monthly, half-monthly, ten-monthly, weekly and so on.