A settlement discount is a percentage discount that you can offer your customers to encourage them to pay their invoices early. It is also known as prompt payment discount or cash discount.
This is a percentage discount if an invoice is paid within the specified number of days, for example a 3% discount if paid within 15 days of the invoice being issued.
In Financials, we offer you 2 settlement discount fields so you can add on 2 discount terms for your customers if you wish to.
You can use the 1st settlement discount fields for just setting up 1 discount term, but you will not be able to enter discount for the 2nd settlement discount where the 1st settlement discount is left empty.
The settlement discount fields are found on the Terms tab of your customer record and you can follow our Populate the Terms tab for a customer article for more details.
You can also add ad-hoc settlement discount for a sales ledger invoice and or credit note if you don't wish to add the settlement discount against your customer records.
Settlement Discount is not automatically calculated when you are not using Bulk Receipts or Contra Adjustments. When creating a sales ledger receipt manually, you will have to manually issue a credit note for the discount you are offering the customer.
Access the Terms tab on a customer record
Click Debtors then click Customers.
Note: All customers are displayed. You can narrow down your search by using the advanced filters. You can also search on the columns directly by pointing the mouse to the name of the column and click on the icon and choose from the available filter list, then click OK.
Click on the Edit button at the bottom of the screen to set the record into edit mode, then click the Terms tab and find the Discount section where you can see the settlement discount fields and enter the agreed terms with your customer.
Note: If you can see the Close button instead of the Edit button, it means that you don't have access to edit customer records.Once you are done, click on Save.
Settlement Discount fields explained
Field | Description | Possible error messages |
1st Settlement Discount % |
| "Settlement Discount 1 needs to be greater than Settlement Discount 2." |
If paid within (days) |
| "If paid within (days) for Settlement Discount 1 must be greater than 0 if Settlement Discount 1 is greater than 0." "If paid within (days) for Settlement Discount 2 must be greater than if paid within (days) for Settlement Discount 1." |
2nd Settlement Discount % |
|
"Settlement Discount 2 needs to be less than Settlement Discount 1" |
If paid within (days) |
|
"If paid within (days) for Settlement Discount 2 must be greater than 0 is Settlement Discount 2 is greater than 0." |