Accept Cash Discount for Customer Payment

This instruction explains how you adjust a customer payment with a deducted cash discount.

Cash discount means that a customer has been granted a certain discount from the invoiced amount if the payment is received within a specified number of days, calculated from the accounting date of the invoice.

Outcome

Cash discount deductions are accepted and recorded. An accounting journal and a customer payment journal are printed.

Accounts receivable and the general ledger are updated. The following account entries are created:

Accounting Rule Account

Debit

Credit

*

Customer

x

Bank

x

AR30 – 310

Cash discount

x

*Account entry based on the original customer invoice.

Before you start

  • The starting conditions listed in Adjusting Customer Payments must be met.
  • Cash discount terms should be defined in 'Cash Discount Term. Open' (CRS077) and connected to the customer on 'Customer. Open' (CRS610/J). Note that the you can add or change terms when creating an invoice.
  • The original customer invoice must have a cash discount.
  • A customer payment must be received within the defined cash discount range and recorded in 'Payment Received. Record' (ARS110).

Follow These Steps

  1. Enter a payment directly on 'Payment Received. Record' (ARS110/E), using 'Journal Entry & Payment. Open' (GLS110/B), or in 'Payment Document. Enter' (ARS105).

  2. On (ARS110/F), select an sorting order to identify the invoice records, when necessary:

    • 1 = Payer
    • 2 = Customer
    • 3 = Invoice number
    • 4 = Quick entry
    • 5 = Group invoice
    • 6 = Payer, sorted by due date.

  3. Select one of the following alternatives:

    • For entering full payments, continue with Enter Full Payment of Invoice with Cash Discount
    • For entering partial payments with or without VAT handling, continue with Enter Partial Payment of Invoice with Cash Discount
    • For granting cash discount to late customer payments, continue with Grant Cash Discount to Late Customer Payment
    • For selecting VAT codes for any cash discount VAT, continue with Select VAT Codes for Cash Discount VAT (Gross Method).

Enter Full Payment of Invoice with Cash Discount

  1. On the F panel, select option 1 = 'Full payment' for the invoice record to which the payment should be allocated.

  2. On the K panel, review and change the proposed discount based on the transaction date of the invoice, if necessary.

  3. Select one of the following alternatives:

    • To select VAT codes for VAT included, continue with Select VAT Codes for Cash Discount VAT (Gross Method)
    • If not, continue with the next step.

  4. If the cash discount is deducted correctly (that is, the payment equals the invoice amount minus the granted cash discount), approve the amount paid by pressing Enter. Continue with Select VAT Codes for Cash Discount VAT (Gross Method).

Enter Partial Payment of Invoice with Cash Discount

  1. If the payment is a partial payment of an invoice with a cash discount and paid within the defined cash discount range, select option 11 = 'Partial payment' for the invoice record.

  2. On the H panel, enter the amount paid. Press Enter.

  3. On the K panel, select one of the following alternatives:

    • If the proposed cash discount is correct, press Enter and continue with Finish the Cash Discount Entry and Create Voucher.
    • If you wish to specify VAT codes for VAT included, continue with Select VAT Codes for Cash Discount VAT (Gross Method).

Grant Cash Discount to Late Customer Payment

  1. If the customer has deducted the cash discount but paid too late, accept the cash discount by selecting option 11 = 'Partial payment' for the invoice(s).

  2. On the K panel, enter the amount received. Press Enter to return to the F panel.

    The total amount to distribute in the header of the F panel is reduced by the amount entered.

  3. On the F panel, select one of the following alternatives:

    • Enter an accounting option for the invoice record to record the accepted cash discount variance, or
    • Leave the customer invoice partially paid. Continue with the next step.

Select VAT Codes for Cash Discount VAT (Gross Method)

  1. If you wish to divide the VAT share in relation to other VAT codes, select option 13 = 'Cash discount' in the Option field on the K panel. Press Enter.

  2. On the sub panel K1, divide the cash discount VAT in shares, defining up to three VAT codes and the respective amount. Press Enter to return to the F panel.

Finish the Cash Discount Entry and Create Voucher

  1. Repeat these activities until you have allocated and adjusted the entire total.

  2. To end, press F3 to assign a voucher number to the voucher.

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