Settle a partial vendor payment that has discounts on vendor credit notes

This article walks you through a scenario where a credit memo is settled against an invoice.

Fabrikam’s vendors give cash discounts on credit notes. Vendor 3050 lets Fabrikam take a cash discount of 1 percent if an invoice is paid in 14 days.

Invoice and credit memo

On June 29, April creates an invoice for 1,000.00 for vendor 3050. On July 2, she creates a credit note for 200.00. From the Vendors page, April opens the Settle transactions page. She can use the Settle transactions page to mark both the credit note and the invoice for settlement. A discount of 2.00 is calculated on the credit note. Therefore, the total value of the credit note is reduced to 198.00.

Mark Use cash discount Voucher Account Date Due date Invoice Amount in transaction currency Currency Amount to settle
Selected Normal Inv-10070 3050 6/29/2015 7/29/2015 10070 -1,000.00 USD -990.00
Selected and highlighted Normal CR-10070 3050 7/2/2015 7/29/2015 200.00 USD 198.00

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

Cash discount date 7/13/2015
Cash discount amount 2.00
Use cash discount Normal
Cash discount taken 0.00
Cash discount amount to take 2.00

April clicks Post. She then reviews the completed settlement. April sees that 198.00 of the credit note was applied, and a discount of 2.00 was taken. Therefore, the total is 200.00.

Mark Use cash discount Voucher Account Date Due date Invoice Amount in transaction currency Currency Amount to settle
Selected and highlighted Normal Inv-10070 3050 6/29/2015 7/29/2015 10070 -1,000.00 USD -200.00
Selected Normal CR-10070 3050 7/2/2015 7/29/2015 CR-10070 200.00 USD 198.00

April can review the vendor transactions on the Vendor transactions page by selecting a vendor on the All vendors page and then, on the Action Pane, click Transactions. On this page, April sees that the invoice has a balance of -800.00. She also sees a credit note for 198.00 and a discount of 2.00.

Voucher Transaction type Date Invoice Amount in transaction currency debit Amount in transaction currency credit Balance Currency
Inv-10070 Invoice 6/29/2015 10070 1,000.00 -800.00 USD
Inv-10071 7/2/2015 CR10071 200.00 0.00 USD
DISC-10071 Cash discount 7/2/2015 2.00 0.00 USD
DISC-10071 Cash discount 7/2/2015 2.00 0.00 USD