Early discount/Late charge
Use this table to define the criteria and rules used for the calculation of early payment discounts and late payment charges.
Each set of criteria and rules is defined as an Early discount/Late charge code which can be added to customer and supplier Business Partner (BP) records as a settlement discount code (on the Financials tab). The settlement discount code is applied to invoices, open items and payments associated with the BP but can be amended if authorization to modify it has been granted.
An early discount is defined as one or many fixed rates applied to an open item amount.
A late charge is defined as one or many yearly rates (over 365 days late), depending on the difference between the forecast payment date on the open item and the actual payment date.
You use early discounts and late charges as follows:
- For automatic payments (payment proposals from the customer or the supplier), early payment discounts and late payment charges are calculated automatically, as associated with the corresponding payment.
- For manual payments, the amount is submitted automatically if an open item has an early payment discount or late charge payment attribute associated with it.
- When carrying out an open item inquiry, early payment discounts or late payment charges associated with each open item can be displayed based upon a reference date or a number of days.
- With reminder management, a fixed late charge rate or the late charge rate defined for the customer can be calculated or mentioned on the letters. This is obtained from the settlement discount code specified on the open item.
Prerequisites
Refer to documentation Implementation
Screen management
The Early discount/Late charge function displays a single screen into which you enter the criteria and rules for the calculation of payment discounts.
Entry screen
Presentation
Use this screen to define the criteria and rules for an Early discount/Late charge code.
Each Early discount/Late charge code can store up to 12 early settlement discount rates and late settlement surcharge rates. Always enter the figures in the Number of days/Rate table in ascending order from the earliest payment days/rate on line 1 to the latest payment days/rate on lines 2+:
- Enter settlement discounts, or early payment discounts as negative percentage rates (with a preceding minus ('-') sign).
- Enter surcharges, or late payment charges as positive percentage rates.
The value of parameter DATDEP - Date for the calculation of discounts (TRS chapter, TDC group) determines whether you enter the number of days associated with each percentage rate as negative or positive:
- If set to Open item due date, enter early payments as negative days (with a preceding minus ('-')) and late payment charges as positive days.
- If set to Invoice date, enter both early payments and late payment charges as positive days, usually starting at zero (0) days.
Example 1: Parameter DATDEP=Open item due date
The start date for the calculation of an early payment discount or late payment charge is the open item due date.
The following table demonstrates a set of discount rates:
| Number of days | Rate (Percent) |
|---|---|
| -20 | -2 |
| -10 | -1.5 |
| 0 | 0 |
| 5 | *8 |
| 10 | 12 |
| 80 | 15 |
- A payment 21 days or more before an open item due date receives a 2% early payment discount. On a 1,000 euro invoice the settlement discount would be 20 euros.
- A payment 11 to 20 days before an open item due date (both values included) leads to a 1.5% early payment discount, that is a 15 euro discount on a 1,000 euro invoice.
- No settlement discount (because the Rate=0%) is awarded for a payment on an open item due date (0 days) to 10 days before the due date (both values included).
- No surcharge (because the Rate=0%) is generated for a payment up to 5 days after an open item due date.
- A payment 5 to 9 days after an open item due date (both values included) generates a late payment charge calculated pro rata temporis on an 8% yearly basis. For example, a payment 5 days late for a 1,000 euro invoice generates a surcharge of 1.10 euros (5/365*8/100*1,000=1.10).
- A payment 10 days to 79 days (both values included) after an open item due date generates a late payment charge calculated pro rata temporis on a 12% yearly basis. For example, a payment 73 days late for a 1,000 euro invoice generates a surcharge of 24 euros (73/365*12/100*1,000=24).
- A payment 80 days or more after an open item due date generates a late payment charge calculated pro rata temporis on a 15% yearly basis. For example, a payment 146 days late for a 1,000 euro invoice generates a surcharge of 60 euros (146/365*15/100*1,000=60).
Example 2: Parameter DATDEP=Invoice date
The start date for the calculation of an early payment discount or late payment charge is the invoice, or accounting date.
The following table demonstrates a set of discount rates:
| Number of days | Rate (Percent) |
|---|---|
| 0 | -2 |
| 11 | -1.5 |
| 21 | 0 |
| 31 | *8 |
| 91 | 12 |
| 547 | 15 |
- A payment within 10 days of an invoice date receives a 2% early payment discount. On a 1,000 euro invoice the settlement discount would be 20 euros.
- A payment between 11 and 20 days of an invoice date leads to a 1.5% early payment discount, that is, a 15 euro discount on a 1,000 euro invoice.
- No settlement discount (because the Rate=0%) is awarded for a payment between 21 and 30 days of an invoice date.
- A payment more than 30 days but less than 90 days after an invoice date generates a late payment charge calculated pro rata temporis on an 8% yearly basis. For example, a payment 73 days late for a 1,000 euro invoice generates a surcharge of 16 euros (73/365*8/100*1,000=16).
- A payment over 90 days but less than 546 days after an invoice date generates a late payment charge calculated pro rata temporis on a 12% yearly basis. For example, a payment 146 days late for a 1,000 euro invoice generates a surcharge of 48 euros (146/365*12/100*1,000=48).
- A payment 547 days or more after an invoice date generates a late payment charge calculated pro rata temporis on a 15% yearly basis. For example, a payment 730 days late for a 1,000 euro invoice generates a surcharge of 300 euros (730/365*15/100*1,000=300).
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Fields
The following fields are present on this tab :
Block number 1
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Code used by default for the current BP to identify a series of early discount and late charge rates (up to 12) to be applied to a payment according to a number of days early or days late with respect to the open item date. |
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Non-compulsory field containing the legislation code (miscellaneous table 909). The entered value is used upon creation and validation of the folder and upon addition of data during legislation copy. The data concerning the requested legislations and the common data (legislation code empty) on folder creation. Only the records concerning the folder legislations are retrieved on folder validation. The Legislation field is also used as a filter and checked upon movement selection and entry (entry of invoices, payments, journals etc.). If the field is empty, the current record can be used whatever the legislation of the company concerned by the movement. If a legislation is specified, it will only be possible to use the current early discount/late charge code with companies of the same legislation. |
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This long description is used as a title in screens and reports. By default the short title, the long title or the column header of a data are recorded (on creation/update) in the connection language of the user.
A user who logs on with this language will view the short description, long description or column header in their connection language if a translation exists. Otherwise, these descriptions will be available in the folder language.
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Short title used in the screens and reports. This title is recorded in your connection language. By default the short title, the long title or the column header of a data are recorded (on creation/update) in the connection language of the user.
A user who logs on with this language will view the short description, long description or column header in their connection language if a translation exists. Otherwise, these descriptions will be available in the folder language.
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This field is used to allow access to the transaction to a limited group of companies. |
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Use this field to define the number of days between an open item payment due date and an actual payment date. The value of parameter DATDEP - Date for the calculation of discounts (chapter TRS, group TDC) determines whether you enter the number of days as negative or positive:
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Early discount or late charge rate impacting the invoice amount.
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Block number 3
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The accounting code is a default value used in the setting up of accounting journals. It refers to a table in which a certain number of elements can be found (collectives, accounts or parts of accounts) that can be used to determine the accounting journals that will be posted. |
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The preloaded dimension view codes match those of the default dimension views. |
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The setup determines whether the analytical dimensions can be modified. These are initialized in compliance with the default dimension setup.
In creation mode, as in modification mode, if an order line has been entered and the project code is modified, analytical dimensions are not reset. |
Scope
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This is used to specify whether the discount calculation perimeter relates to the tax excluded amounts or to the tax included amounts of the invoice.
Reminder: the discount base is only calculated if the discount code is set up with at least one discount line (negative rate). |
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Rebate on VAT
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This field makes it possible to link an invoicing element to the early discount code, in order to decrease the base subject to VAT, thus making it possible to apply the early discount on the VAT amount, directly on the invoice.
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This field makes it possible to link an invoicing element to the early discount code, in order to decrease the base subject to VAT, thus making it possible to apply the early discount on the VAT amount, directly on the invoice.
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Local menus
In addition to the generic error messages, the following messages can appear during the entry :
Lead times must be increasing
Lead times (the number of days) must be entered in ascending order, from the earliest number of payment days to the latest number of payment days. For example, from 30 days early (entered with a negative sign as -30) to 547 days late (entered as 547).