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Cash discount dating

April pays the rest of the invoice on July 15, which is after the discount period.Cash discounts are setup and shared for Accounts payable and Accounts receivable.

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For example, an invoice that is marked 2/10, n/30 EOM lists a cash discount, net payment terms, and a specific payment date. If the invoice is paid within the first ten days after receiving it, the seller will discount the order by 2 percent.On June 28, April creates an invoice for 2,000.00 for vendor 3052.The invoice has a cash discount of 1 percent if the invoice is paid in 14 days.She creates a payment journal and enters a line for vendor 3057.She then opens the Settle transactions page, so that she can mark the invoice for settlement.When the credit terms list EOM, usually the debtor has until the end of the month in which it is due to pay the bill.

This article walks you through a scenario where multiple partial payments are made, some within the cash discount period and others outside the cash discount period. Fabrikam receives a cash discount of 1 percent if the invoice is paid in 14 days. The vendor also lets Fabrikam take cash discounts on partial payments.

If the invoice, credit transaction (either a payment or a credit note), or both are entered in a currency other than the accounting currency of the legal entity, the cash discount is calculated using the exchange rate based on the date of the payment or credit note.

If the invoice and credit document are entered in different legal entities, and if the accounting currencies for the legal entities differ, the exchange rate is taken from the legal entity of the invoice, as of the date of the credit document.

Only one cash discount is granted when the invoice is paid, based on which cash discount date is meet in the sequence of cash discounts.

This article provides two scenarios that show how a cash discount can be taken even if the payment is made outside the cash discount period.

The payment is eligible for a discount, because Fabrikam takes discounts on partial payments.