You may want to offer cash discount incentives if the customer pays the invoice within the net days. These cash discounts can be calculated on the Net amount of the invoice or Gross amount of the invoice.
- Select the Terms of payment menu item.
- You access Work with terms of payment. Select/add the terms of payment.
- On the detail panel, complete the following fields to offer cash discounts.
- Cash discount 1 days
- Indicate the number of days that Cash discount 1% is valid. Payment must be received within this time frame or the discount offer will be rescinded. If you wish to extend this offer for your customer you can, optionally, define a number of grace days in the Business partner file which will allow them to make the payment at a later time. See Connect the terms of payment to a customer.
- Cash discount 1%
- Enter the percentage applicable for cash discount 1.
- Cash discount 2 days
- Indicate the number of days that Cash discount 2% is valid. Payment must be received within this time frame or the discount offer will be rescinded. If you wish to extend this offer for your customer you can, optionally, define a number of grace days in the Business partner file which will allow them to make the payment at a later time. See Connect the terms of payment to a customer.
- Cash discount 2%
- Enter the percentage applicable for cash discount 2.
- Cash discount net amount
- The True/False setting in this field dictates if the calculation will be based on the invoice net or gross amount. This field controls what amount is used in A/R and not on the invoice.
- Calculated on Net amount:
- Set this field to True and the Cash discount deduct field to True in the DIS control file, Pricing policies panel. The VAT amount will be lower as the cash discount is withdrawn before VAT is added.
- Calculated on Gross amount:
- Set this field to False and the Cash discount deduct field to False in the DIS control file, Pricing policies panel. The cash discount does not influence any amount as it is withdrawn after VAT is added.
Example – Net amount
The VAT amount will be lower because the cash discount is withdrawn before VAT is added.
| Cash discount deduct (DIS control file) | TRUE |
| Cash discount net amount (Terms of payment table) | TRUE |
| Net amount on order line | 100.00 |
| VAT percentage | 25% |
| Cash discount percentage | 10% |
The values on the invoice are
| Order line total | 100.00 |
| VAT amount (25% of 90.00) | 22.50 |
| Invoice total | 122.50 |
Example – Gross amount
Any cash discount does not affect the amount because it is withdrawn after VAT is added.
| Cash discount deduct | FALSE |
| Cash discount net amount (Terms of payment table) | FALSE |
| Net amount on order line | 100.00 |
| VAT percentage | 25% |
| Cash discount percentage | 10% |
The values on the invoice are:
| Order line total | 100.00 |
| VAT amount (25% of 100.00) | 25.00 |
| Invoice total | 125.00 |