There are different ways to set up a payment discount for an invoice.
- Payment discount is known at the time when the invoice is entered, an existing payment term can be selected or enter a new payment term created for the invoice.
- Payment discount is not agreed until the time the invoice is paid, and it is required that it must be handled differently. In this case, the customer will reduce the payment without negotiating a payment discount. If the discount is acceptable, the payment term for the invoice can be adjusted after it has been posted.
Specifying the G/L Accounts for Payment Discounts
The G/L Accounts for payment discounts must be set up differently depending on whether payment discounts are to be calculated on amounts including taxes or not.
Payment Discounts known at Time of Invoicing
The first method for recording the payment discount for an invoice is by setting the relevant payment term in the Payment Terms field on the Invoicing FastTab when creating the invoice. The program will always use the payment term from the customer card as a default.
To access the Payment Terms card:
- In the Search field, type Payment Terms and select the page from the drop-down list.
The Payment Terms page displays.
The payment discount possible for a sales invoice or sales credit memo is recorded on the customer ledger entry. The original payment discount amount at the time the invoice or credit memo was posted is recorded in the Original Pmt. Disc. Possible field and the Remaining Pmt. Disc. Possible field. The Original Pmt. Disc. Possible field cannot be changed.
If it is necessary to change the amount of the payment discount at any time before the customer ledger entry has been fully applied, it can be done by a change of the amount in the Remaining Pmt. Disc. Possible field.
The following table explains the fields on the Payment Terms page:
| Field | Description |
| Code | Payment code. |
| Due Date Calculation | Specifies a formula that determines how to calculate the due date. |
| Discount Date Calculation | Specifies a formula that determines how to calculate the discount date. |
| Discount % | The percentage discount. |
| Calc. Pmt. Disc. on Cr. Memos | If a discount is specified above, add a checkmark to this option to calculate the payment discount on credit memos. |
| Description | Payment term description. |
Payment Discounts only known at Time of Payment
The customer reduces the payment amount and the difference will be posted as a discount, the open customer ledger entry can be modified. Only the following fields are editable: Due Date, Pmt. Discount Date and Remaining Pmt. Disc. Possible. The payment discount possible amount is in the currency of the invoice.
Applying Customer Ledger Entries with Payment Discount Amounts
When applying credit memos, payments and refunds, the program checks the Pmt. Discount Date field of the applied customer ledger entry or entries. If the posting date of the application is the same or earlier than the Pmt. Discount Date of the applied entry, a discount amount will be calculated if the applied entry is fully applied.