Example of Deriving Discount Amounts
This example illustrates how Receivables derives discount information based on the date of the receipt.
When you enter receipts manually, Receivables determines whether discounts are allowed based on the payment terms, discount grace days, Receivables system options, transaction date, and the payment terms discount basis date (receipt date, receipt application date, or receipt deposit date). If discounts are allowed, Receivables determines the amount of both earned and unearned discounts, as determined by the details of your setup.
Scenario
Assume that you're using the following information:
-
Unearned Discounts = Yes
-
Payment Terms: 10/10, 5/15, Net 30
-
Discount Basis Date: Receipt Date
-
Discount Grace Days = 0
-
Calculate Discount on Lines Only = No
-
Allow Discount on Partial Payments = Yes
This table shows the discount details:
|
Percent |
Date |
On Lines Only |
On Partial Payments |
|---|---|---|---|
|
5 |
17-DEC-10 |
NO |
YES |
|
10 |
12-DEC-10 |
NO |
YES |
Assume these invoice details:
-
Invoice #101
-
Invoice Date: 02-DEC-10
-
Due Date: 01-JAN-11
-
Amount: $1100
The following table displays the default discount amounts based on different receipt application dates. You can also see the amount of earned and unearned discounts that your customers can take.
|
Receipt Date |
Receipt Amount |
Default Discount Amount |
Message Line |
Earned Discount Allowed |
Unearned Discount Allowed |
|---|---|---|---|---|---|
|
From 02-DEC-10 to 12-DEC-10 |
$990 |
$110 |
Discount Earned = 110 Total = 110 |
$110 |
None |
|
After 17-DEC-10 |
$990 |
0 To take the unearned discount, you must update the amount. |
Discount Earned = 0 Total = 110 |
None |
$110 |
|
From 02-DEC-10 to 12-DEC-10 |
$1000 $10 of the receipt is left as Unapplied after the default discount. |
$110 |
Discount Earned = 110 Total = 110 |
$110 |
None |
|
From 13-DEC-10 to 17-DEC-10 |
$1000 After the default discount of $52.63, the receipt is fully applied. However, a balance of $47.37 remains on the invoice. |
$52.63 To take the unearned discount, you must update the amount. |
Discount Earned = 52.63 Total = 110 |
$52.63 |
$57.37 |
|
After 17-DEC-10 |
$1000 Since there's no default discount, the receipt is fully applied. A balance of $100 remains on the invoice. |
0 To take the unearned discount, you must update the amount. |
Discount Earned = 0 Total = 110 |
None |
$110 |