Using Discount when Receipting a Payment

When receipting in a payment there is an option to add in a discount.  This is designed to be used for rounding the amounts due to prevent a small balance being left over.

In the example below, $1,798.88, the Gross amount is owing on the Customer Account, but they paid the nett amount $1,798.90. By using the discount as a negative, the Nett amount is what will be deposited into the bank.

This is not designed to give the Customer a Prompt Payment Discount.  Please use the Customer Adjustment for this.

The incorrect use of the Discount option will have an affect on your GST if you are on Payments Basis.

For example

We have an invoice with GST of $199.88

If this is receipted in two parts and the second part has a discount

The GST Audit Report will record

While the GST on Income will record:

An inquiry on the GST on Invoice General Ledger will show two entries:

• The initial value of the GST that was charged on the invoice
• a credit of the GST content of the discount given

This makes the GST return more difficult to reconcile.

Therefore using the Customer Adjustment keeps the transactions correct and easier to reconcile the GST.

Enter the Customer Adjustment

Record the payment

Looking at the Customer's Account we see the payments

The GST return shows the correct GST and this is entered in the GST on Income GL Code.