Setting Up Prompt Payment Discount Preferences

Set up prompt payment discount preferences to calculate and adjust the tax on prompt payment discount per nexus and per transaction type. When enabled, the credit transaction for tax on prompt payment discount, taken on sales and purchase transactions, is automatically created.

Prerequisites

Before setting up prompt payment discount preferences, make sure that you have enabled the following features in your account:

• Include Tax for Term Discounts - Go to Setup > Accounting > Accounting Preferences. This feature is available under Accounts Receivable.

• Expand Account Lists - Go to Setup > Accounting > Accounting Preferences. This feature is available under General Ledger.

To set up prompt payment discount preferences:

1. Go to Setup > Accounting > Prompt Payment Discount Preferences.

2. For each nexus, check whether prompt payment discount is calculated and adjusted on sales and purchase transactions.

3. For each nexus, check whether prompt payment discount is applied as a single transaction line.

4. Click Save.

For information on how tax is recorded on payment discounts, see Recording Tax on Prompt Payment Discount

Important:

Ensure that Tax Rounding Level is set to Item Line Level in Setup > Accounting > Set Up Taxes for this feature to work properly. See Setting Tax Rounding Levels, Methods, and Precision Settings for more information.

Roles and Permissions

You can use Tax Reporting roles from International Tax Reports with the Tax on Prompt Payment Discount feature. If you want to customize standard accounting center roles to use this feature, do the following:

• Set the Tax Items permission to view level

• Add permissions to create credit transactions such as credit memo and bill or vendor credit

For more information see, Permissions to Use International Tax Reports.

General Notices