Discounts Applied to Netted Transactions
You have the option to process accounts payable discount terms and accounts receivable discount terms as they are defined on each side to netted transactions. You can select a Apply Discount to Transactions check box on the Netting Contracts - Primary Information page or the Manual Select Netting - Manual Selection page.
You can set up Manual Select Netting to manually net the accounts payable and accounts receivables transactions, or you can run the Automatic Netting Selection process (TR_NET_ASEL) to net these transactions for any date that occurs on or before the date that you run the pay cycle. The Netting Auto Selection process stores the discount available amounts related to selected accounts payable vouchers and accounts receivable items based on the selection of the Apply Discount to Transactions check box on the Netting Contracts - Primary Information page.
When you run the Netting Close process, TR_NET_CLOSE, the Pay Cycle Manager calls the Application Engine program (TR_NET_DSCNT) to apply the discounts to the netted transactions. This program updates the netted amounts, balance amounts, and discount applied amounts on the netting tables for Netting Reference IDs that have the apply discount option set. The program will then call on accounts payable to provide the amount of discount taken for the selected accounts payable vouchers and will call on accounts receivable to provide the amount of discount taken for the selected accounts receivables items to complete the Netting Close process.
These are some of the factors that you will want to consider when applying discounts to netted transactions.
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While applying discounts to netted transactions, all accounts payable vouchers and accounts receivable items associated with a netting reference are evaluated for discount and a discount is applied wherever applicable. The collection of any accounts receivable item balance, whether partial or final, could be impacted by various factors such as the ability to pay by the customer, the amount of liquidity, and more as an event that happens after the process applies the discount to netted transactions and the information stored in the accounts receivable tables is not subject to reconciliation with the information stored in Netting History tables.
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The selection of the Apply Discount to Transactions check box is applied to both Accounts Payable vouchers and Accounts Receivable items.
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While applying a discount to netted transactions, accounts payable vouchers and accounts receivable items are not re-sequenced.
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You cannot partially deselect an accounts payable voucher or an accounts receivable item when you select the Apply Discount Transaction check box.
Here is an example of bilateral netting transactions where discounts have been applied to netting transactions.
Netting Scenario where AR > AP
| Gross Amount | Netting Amount | Balance Amount | Deselected Amount | Earned Discount | Discount Available | Discount Taken | Adjusted Gross Amount | Netting Status | |
|---|---|---|---|---|---|---|---|---|---|
|
AP Voucher |
1500.00 |
1500.00 |
|
|
Y |
30.00 |
|
|
NET |
|
AP Voucher |
1000.00 |
1000.00 |
|
|
Y |
20.00 |
|
|
NET |
|
AP Voucher |
500.00 |
500.00 |
|
|
Y |
10.00 |
|
|
NET |
|
3000.00 |
3000.00 |
|
|
|
60.00 |
|
|
|
|
|
AR Item |
1500.00 |
1500.00 |
|
|
Y |
30.00 |
|
|
NET |
|
AR Item |
2000.00 |
1500.00 |
500.00 |
|
Y |
40.00 |
|
|
SPLIT |
|
AR Item |
500.00 |
|
500.00 |
|
Y |
10.00 |
|
|
BALANCE |
|
4000.00 |
3000.00 |
1000.00 |
|
|
80.00 |
|
|
|
|
|
After Applying Discount |
AR>AP |
||||||||
|
Gross Amount |
Netting Amount |
Balance Amount |
Deselected Amount |
Earn Discount |
Discount Available |
Discount Taken |
Adjusted Gross Amount |
Netting Status |
|
|
AP Voucher |
1500.00 |
1470.00 |
|
|
Y |
30.00 |
30.00 |
1470.00 |
NET |
|
AP Voucher |
1000.00 |
980.00 |
|
|
Y |
20.00 |
20.00 |
980.00 |
NET |
|
AP Voucher |
500.00 |
490.00 |
|
|
Y |
10.00 |
10.00 |
490.00 |
NET |
|
|
3000.00 |
2940.00 |
|
|
|
60.00 |
60.00 |
2940.00 |
|
|
AR Item |
1500.00 |
|
|
|
Y |
30.00 |
30.00 |
1470.00 |
NET |
|
AR Item |
2000.00 |
1470.00 |
490.00 |
|
Y |
40.00 |
40.00 |
1960.00 |
SPLIT |
|
AR Item |
500.00 |
147000 |
490.00 |
|
Y |
10.00 |
10.00 |
490/— |
BALANCE |
|
|
4000.00 |
2940.00 |
980.00 |
|
|
80.00 |
80.00 |
3920.00 |
|