About Early Payment Discounts
If the Tax Discount/Allowance field is selected for Tax System 1 on the Tax Systems form, and an early payment discount exists, then when a regular or landed cost voucher is created, the discount and non-discount amounts must be calculated differently. The early payment discount initially is based on the voucher total, including all charges and VAT on the voucher. At the moment of payment, if the early payment discount is applied, the discount amount is split into two parts:
- Net discount amount, calculated by applying the discount percent that is defined in the payment terms to the voucher total, exclusive of the VAT.
- VAT adjustment, calculated by applying the discount percentage that is defined in the payment terms to the total VAT amount.
This discount affects these areas of the system:
- A/P Check Printing/Posting
- A/P Payment Distributions
- A/P Payments
- A/P Posted Transactions Detail
- A/P Posted Transactions Summary
- A/P Quick Payment Application
- A/P Vouchers and Adjustments
- A/R Payment Distributions
- A/R Payments
- A/R Posted Transactions Detail
- A/R Posted Transactions Summary
- A/R Quick Payment Application
- EU VAT Report
- Generate A/P Transactions
- Generate Landed Cost Vouchers
- Purchase Order Receiving
- VAT Report
Example: A/P Voucher Distributions
The Discount Amount is calculated against the sum of the Purchase Amount and the VAT Amount, as shown in this table:
| Concept | Tax Basis | VAT Percent |
|---|---|---|
| Purchase Amount | 400.00 | |
| Tax Basis | 400.00 | |
| Plus VAT | 76.00 | 19% |
| Voucher Total | 476.00 | |
| Minus Discount | 14.28 | 3% |
| Net Voucher Amount | 461.72 |
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