Considerations for Discount Allocation Methods

Discounts are taken when invoices are paid. On the Manage Invoice Options page, you can specify how to allocate these discounts. Select any one of the following methods:

• All invoice lines

• Tax lines and single distribution

• Single distribution

All Invoice Lines

This method automatically prorates discounts across all invoice lines. Discounts are assigned to the charge account unless the invoice is matched to a purchase order that's set to accrue on receipt. For those invoices, the discount is assigned to the price variance account.

Note: If you exclude tax from discount calculations, discounts are allocated only to expense lines and not to tax lines.

Tax Lines and Single Distribution

This method prorates a percentage of the discount across tax lines based on the percentage of tax lines on the invoice.

For example, if tax distributions represent 10 percent of the total invoice amount, 10 percent of the discount is prorated across the tax distributions. The remaining 90 percent of the discount is applied to the Discount Taken distribution specified on the Manage Common Options for Payables and Procurement page.

Note: You can't select this method if you exclude tax from discount calculations.

Single Distribution

This method credits the Discount Taken distribution specified on the Manage Common Options for Payables and Procurement page. Select this method if you enable automatic offsets and you want to distribute the discount taken across balancing segments.