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HowTo CashDiscounts 88 PDF
HowTo CashDiscounts 88 PDF
HowTo CashDiscounts 88 PDF
How-To Guide
PUBLIC
Applicable Release:
All Countries
English
December 2009
Table of Contents
Introduction..................................................................................................................................... 3
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How to Define Cash Discounts
Introduction
Cash discounts are used to encourage your customers to settle their debts as soon as possible. Your
vendors may also grant cash discounts when you pay your A/P invoices prior to their due dates.
SAP Business One enables you to do the following:
Define cash discounts in the Payment Terms field linked to your customers and vendors
Define a hierarchy of cash discounts set according to the payment date
Apply a cash discount to freight defined in an invoice
Apply a cash discount to tax amounts included in an invoice
Note
This feature is dependent on your localization. For example:
The cash discount process that automatically applies to VAT is relevant for
Austria, Australia, France, Finland, Norway, Portugal, China, Germany, Panama,
New Zealand, and Spain.
The cash discount process that automatically applies only to the amount before
tax is relevant for Cyprus, Denmark, United Kingdom, Netherlands, and Sweden.
Once a payment takes place, SAP Business One compares the payment date to the due date of the
invoice. If the payment date is earlier than the due date, SAP Business One checks if the payer is
entitled to a discount according to the payment term appearing in the invoice. If a discount is
warranted, SAP Business One updates accordingly the amount to be paid in the payment.
Once the payment is completed, the application creates an appropriate journal entry that also reflects
the cash discount.
Note
The cash discount feature is not relevant for the following localizations: Israel and
Mexico.
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How to Define Cash Discounts
2. On the General subtab of the Sales tab, define a sales cash discount account in the Cash
Discount field.
3. On the General subtab of the Purchasing tab, define a purchasing cash discount account in the
Cash Discount field.
To use the net procedure, you have to define an account in the Cash Discount Clearing field.
For information, see Using Net Procedure.
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How to Define Cash Discounts
Setting Authorizations
For information about the authorizations required for cash discounts, see the document How to Define
Authorizations in Releases 8.8 in the documentation area of SAP Business One Customer Portal at
http://service.sap.com/smb/sbocustomer/documentation.
Note
If you have already defined cash discounts in your company, after selecting one of them
you can click next to the Cash Discount Name field to open the Cash Discount
window.
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How to Define Cash Discounts
Code Enter a code for the cash discount. This field is mandatory.
Name Enter a name for the cash discount. We recommend entering the name of the
cash discount in this field because it is then displayed in the Cash Discount
Name dropdown list.
By Date Determine the method of applying the cash discount.
To apply the cash discount on a specific day of the month, for example, on the
3rd, 10th, 15th, and so on, select this checkbox. For information see Defining Cash
Discounts by Date.
To apply the cash discount according to the number of days following the posting
date of the invoice, for example, after 10 days, 20 days, and so on, deselect this
checkbox. For information see Defining Cash Discounts by Days after Posting
Date.
Freight Select this checkbox to include freight in the cash discount calculation, if freight
is included in the invoice.
Sales Tax Select to calculate the cash discount also on the sales tax amount calculated in
the invoice.
Note
This field is for the US localization only. For information see
Defining Cash Discounts that Apply on Sales Tax: Canada and US.
5. Add the cash discount.
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How to Define Cash Discounts
Day Enter the day of the month on which to apply the cash discount, for
example: 10th, 20th, 31st.
+Month Enter the number of months after the invoice's posting date on which to
apply the cash discount.
For example, enter 0 to apply the cash discount on the same month as the
invoice's posting date. Enter 1 to apply the discount on the following month.
Discount % Enter the cash discount rate relevant for each day and month after the
invoice's posting date.
5. Add the cash discount.
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How to Define Cash Discounts
Example
In the Cash Discount window there are four different cash discount rates applied according to the day
of payment. The cash discount table is as follows:
# Day +Month Discount %
1 10 0 20%
2 20 0 15%
3 31 0 10%
4 15 1 5%
5 0%
st
If the invoice posting date is August 1 , the discounts apply as follows:
Payment Date Cash Discount Rate
August 1 10 20%
August 11 20 15%
August 21 31 10%
September 1 15 5%
After September 16 0%
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How to Define Cash Discounts
Days After Posting Date Enter the number of days after the invoice's posting date on
which the cash discount applies, for example, 10, 20, 31.
Discount % Enter the cash discount rate relevant for the number of days.
4. Add the cash discount.
Example
The Cash Discount window displays a table with three different cash discount rates. Each rate applies
to a payment recorded after a certain number of days following the invoice's posting date. The rates
are as follows:
# Days After Posting Date Discount %
1 10 20%
2 20 10%
3 31 5%
4 0%
If the invoice posting date is August 15th, the cash discount is calculated as follows:
Payment Date Discount %
August 15 25 20%
August 26 September 4 10%
September 5 15 5%
After September 16 0%
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How to Define Cash Discounts
Note
Modifying the Payment Terms Setup window and the Cash Discount window
updates all open documents that utilize those terms.
Deletion of cash discounts is possible if the cash discount is not linked to other
payment terms or documents.
Procedure
1. From the SAP Business One Main Menu, choose Administration Setup Business Partners
Payment Terms.
The Payment Terms Setup window opens.
2. To update the cash discount, click next to the Cash Discount Name field.
3. In the Cash Discount window, make your changes. To delete the cash discount, right-click the
window and choose Remove. Alternatively, from the Data menu, choose Remove.
4. Choose the Update button.
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How to Define Cash Discounts
Note
The following procedure describes the use of cash discounts for incoming
payments. Using cash discounts for outgoing payments is similar.
The same behavior applies when you create incoming payments for A/R reserve
invoices and A/R down payment invoices.
Procedure
1. From the SAP Business One Main Menu, choose Banking Incoming Payments Incoming
Payments.
The Incoming Payments window opens.
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How to Define Cash Discounts
2. In the Code field, specify the customer code and press TAB.
SAP Business One does the following:
{ Displays all the open invoices for the selected customer.
{ Calculates the cash discount when you record a payment from your customer
Note
If you record a payment after the invoice due date has passed, the application does not
calculate any cash discount.
3. The following fields are related to the cash discount. You can view and change the discount
manually:
Field Activity/Description
Cash Discount % Displays the cash discount rate calculated according to:
Invoice posting date
Payment posting date
Cash discount linked to the payment terms specified in the invoice
Total Discount Displays the total discount amount calculated according to the Cash
Discount %.
Note
Note
The customer is credited for the original full amount of the A/R invoice. The cash
discount applies to VAT as well. In case of partial payment, the customer is credited for
the respective amount of the original amount of the invoice and not for the amount
actually paid.
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How to Define Cash Discounts
2. In the Min. Cash Discount % (A/P) field, specify the minimum cash discount to be considered by
the payment wizard.
3. Choose the Update button.
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How to Define Cash Discounts
Note
This function is relevant only for A/R or A/P documents that create accounting
transactions.
Procedure
1. From the SAP Business One Main Menu, choose Sales A/R or Purchasing A/P and choose
a document that creates accounting transactions.
2. Specify the required data, and on the Accounting tab, select the Max. Cash Discount checkbox.
Note
You cannot change the status of the checkbox after adding the document.
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How to Define Cash Discounts
1. From the SAP Business One Main Menu, choose Business Partners Internal Reconciliations
Reconciliations.
2. In the BP Internal Reconciliation Selection Criteria window, select the Manual radio button and
a business partner.
3. Choose the Reconcile button.
Note
You cannot use cash discounts for multiple business partners or for automatic and
semiautomatic internal reconciliations.
The Internal Reconciliation window opens.
4. To select one or more open invoices, double-click the invoice row or select its checkbox in the
Selected column.
5. Select one of the payments using the same method. Once you have selected the payment, the
application calculates the cash discount value by default and updates it in the Cash Discount
Amount field for each invoice. SAP Business One calculates the cash discount according to the
business partners payment terms and with reference to the posting date of the payment
selected for reconciliation.
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How to Define Cash Discounts
Note
By default, the Cash Discount Amount field is not visible. After you select a
payment, if the calculated cash discount is not zero, the Cash Discount Amount
6. To complete the reconciliation, choose the Reconcile button. The reconciliation can be
completed only if the total value in the Amount to Reconcile column is zero.
The cash discount value total is posted on reconciliation as part of the internal reconciliation
journal.
Example
You selected an invoice balance due of 100 and a payment of 63.
There is a 10% cash discount associated with the invoice.
If you manually adjusted the value in the Amount to Reconcile field to 70, on selection of a
payment the following fields in the invoice row are updated with the values:
{ Cash Discount Amount: 7
{ Amount to Reconcile: 63
After the selection of a payment, you manually adjusted the Amount to Reconcile field in the
invoice row to 63. The cash discount amount is calculated as follows: (63 / (100 10)% x
100%) - 63 = 7.
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How to Define Cash Discounts
Note
The Net Procedure feature is relevant for the following localizations: Austria, Australia-
New Zealand, Finland, France, Germany, Spain, and Switzerland.
Prerequisites
You have defined a cash discount clearing G/L account. For information, see Defining G/L
Accounts for Cash Discounts.
Procedure
1. From the SAP Business One Main Menu, choose Purchasing - A/P A/P Invoice.
2. Specify the necessary information for the invoice.
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How to Define Cash Discounts
Note
The same behavior applies to outgoing payments that are created for A/P invoices.
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How to Define Cash Discounts
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