Settle a partial customer payment and the final payment in full before the discount date

This article provides scenarios that show how to record partial payments for a customer and take cash discounts within the cash discount period.

Fabrikam sells goods to customer 4028. Fabrikam offers a cash discount of 1 percent if the invoice is paid in 14 days. Invoices must be paid in 30 days. Fabrikam also offers cash discounts on partial payments. The settlement parameters are located on the Accounts receivable parameters page.

Customer invoice

On June 25, Arnie enters and posts an invoice for 1,000.00 for customer 4028. Arnie can view this transaction on the Customer transactions page.

Voucher Transaction type Date Invoice Amount in transaction currency debit Amount in transaction currency credit Balance Currency
FTI-10010 Invoice 6/25/2015 10010 1,000.00 1,000.00 USD

From the Customer or Customer transactions page, Arnie can open the Settle transactions page to view the dates and amounts of cash discounts that are available for the invoice. The due date is July 25, and a cash discount of 10.00 is available if the invoice is paid by July 9.

Mark Use cash discount Voucher Account Date Due date Invoice Amount in transaction currency Currency Amount to settle
Selected Normal FTI-10010 4028 6/25/2015 7/25/2015 10010 1,000.00 USD 990.00

Discount information appears at the bottom of the Settle transactions page for the marked invoice.

Cash discount date 7/09/2015
Cash discount amount 10.00
Use cash discount Normal
Cash discount taken 0.00
Cash discount amount to take 10.00

Arnie clicks the Cash discount tab to view the discount amount.

Cash discount date Cash discount amount Amount in transaction currency
7/9/2015 10.00 990.00
7/25/2015 0.00 1,000.00

Partial payment by using the Enter customer payments page

Customer 4028 sends a payment for 500.00 on July 1. To enter this payment, Arnie doesn't click Lines. Instead, he records the payment by creating a new payment journal and then opening the Enter customer payments page. He enters the payment information and marks the invoice that he entered. When Arnie enters 500.00 as the amount, he also enters 500.00 in the Amount to pay field in the grid. Because Fabrikam allows a cash discount on partial payments, he sees that a partial cash discount of 5.05 will also be taken. The calculation for this discount is 500.00 ÷ 0.99 × 0.01 = 5.05. (In this calculation, 500.00 is divided by 0.99, because there is a 1-percent discount. Therefore, the customer pays 99 percent of the invoice. The result is then multiplied by the discount percentage, which is 1 percent, or 0.01. If the customer takes the full discount of 10.00, the amount that must be settled will be 990.00.) Discount information appears in the grid at the bottom of the Enter customer payments page.

Cash discount amount to take Cash discount taken Amount to pay
5.05 0.00 500.00

Partial payment by using the journal lines

Instead of opening the Enter customer payments page in the payment journal, Arnie can click Lines to enter a payment. The payment journal is displayed, where Arnie can enter a line for customer 4028. Arnie then opens the Settle transactions page, so that he can mark the invoice for settlement. Arnie marks the invoice and changes the value in the Amount to settle field to 500.00. Again, he sees that the value in the Cash discount amount field is 10.00 for the full invoice, and the value in the Cash discount amount to take field is 5.05. Therefore, Arnie is settling 505.05 of this invoice.

Mark Use cash discount Voucher Account Date Due date Invoice Amount in transaction currency Currency Amount to settle
Selected Normal FTI-10010 4028 6/25/2015 7/25/2015 10010 1,000.00 USD 500.00

Discount information appears at the bottom of the Settle open transactions page.

Cash discount date 7/09/2015
Cash discount amount 10.00
Use cash discount Normal
Cash discount taken 0.00
Cash discount amount to take 5.05

If the customer wants to settle exactly half the invoice, the customer submits a payment of 495.00. In this case, Arnie enters 495.00 in the Amount to settle field. The cash discount for 5.00 will also be taken, so that the total settled amount is 500.00.

Mark Use cash discount Voucher Account Date Due date Invoice Amount in transaction currency Currency Amount to settle
Selected Normal FTI-10010 4028 6/25/2015 7/25/2015 10010 1,000.00 USD 495.00

Discount information appears at the bottom of the Settle open transactions page.

Cash discount date 7/09/2015
Cash discount amount 10.00
Use cash discount Normal
Cash discount taken 0.00
Cash discount amount to take 5.00

Arnie closes the Settle transactions page. A payment line for 495.00 is created in the journal, and Arnie then posts the journal. He can review the customer transactions on the Customer transactions page. On this page, Arnie sees that the invoice has a balance of 500.00. He also sees a payment of 495.00 and a discount of 5.00.

Voucher Transaction type Date Invoice Amount in transaction currency debit Amount in transaction currency credit Balance Currency
FTI-10010 Invoice 6/25/2015 10010 1,000.00 500.00 USD
ARP-10010 Payment 7/1/2015 495.00 0.00 USD
DISC-10010 Cash discount 7/1/2015 5.00 0.00 USD

Payment for the remaining amount

Customer 4028 pays the remaining amount of 495.00 on July 8, which is in the cash discount period. Arnie creates the payment journal on July 8 and marks the transaction for settlement. He sees that the amount that must be settled is 495.00. The value in the Estimated cash discount field is 5.00, because the 5.00 discount was previously taken.

Marked total 495.00
Estimated cash discount 5.00

Information about the marked transaction appears in the grid on the Settle open transactions page.

Mark Use cash discount Voucher Account Date Due date Invoice Amount in transaction currency Currency Amount to settle
Selected Normal FTI-10010 4028 6/25/2015 7/25/2015 10010 1,000.00 USD 495.00

Discount information appears at the bottom of the Settle open transactions page.

Cash discount date 7/09/2015
Cash discount amount 10.00
Use cash discount Normal
Cash discount taken 5.00
Cash discount amount to take 5.00

Arnie posts this journal and reviews the customer transactions on the Customer transactions page. The balance for the invoice is now 0.00, and Arnie sees the two payments and the two cash discounts.

Voucher Transaction type Date Invoice Amount in transaction currency debit Amount in transaction currency credit Balance Currency
FTI-10010 Invoice 6/25/2015 10010 1,000.00 0.00 USD
ARP-10010 Payment 7/1/2015 495.00 0.00 USD
DISC-10010 Cash discount 7/1/2015 5.00 0.00 USD
ARP-10011 Payment 7/8/2015 495.00 0.00 USD
DISC-10011 Cash discount 7/8/2015 5.00 0.00 USD