• Ant
  • New member
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  • From: Johannesburg,South Africa
  • Registered: 04/13/2009
  • Posts: 9

Topic: Prompt payment discounts

I've been testing the prompt payment discount feature & have a few questions.

I have set up a test customer with a prompt payment discount percentage of 2.5%.

Where do I define what is regarded as a prompt payment? This will need to be 30 days.

I created a direct invoice for my test customer for ZAR 1000 plus 14 % VAT, and immediately after that receipted a payment of ZAR 1111.50 (ie 1000 less 2.5 % plus 14%). When I allocated this full amount to the invoice (I left the amount of discount field empty, which may be incorrect), FA reports that the invoice is settled, which I would expect.

But if I run a statement for the customer, it shows the ZAR 28.50 still outstanding, and if I look at allocating further amounts to the customer, I still see this amount as not having been settled.

If I fill in the discount amount field on receipt of payment, things seem to make a little more sense, but then the logic of predefining the prompt payment discount percent per customer seems to disappear, since I can simply record any discount to make things balance manually.

Can you help clarify this?

  • joe
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  • Registered: 03/15/2007
  • Posts: 5,107

Re: Prompt payment discounts

Due to various rules on how to calculate the percent I will demonstrate how it works:

Customer A has marked 2.5% for prompt payment discount. We issue an invoice on $125.
You get payment from your customer A. A field indicates that customer A has prompt payment discounts on 2.5% (only informative field). You decide if  this is a prompt payment and then it is up to you to split the fysical payment and the discount field (due to various rules on how to calculate ev. tax). If you want full 2.5% on $125 and you got $121,87 from Customer A you enter that in the first field and the discount $3,13 in the second field.
Now you process the payment and if you continue to immediate allocation you will see that everything end up right-

/Joe

  • Ant
  • New member
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  • From: Johannesburg,South Africa
  • Registered: 04/13/2009
  • Posts: 9

Re: Prompt payment discounts

aha. that explains it nicely. I was missing the fact that the discount % was informative only.

thanks again Joe
keep up the great work