Settle a partial customer payment that has discounts on credit notes

This article walks you through a scenario where a cash discount is taken on a credit note when the original invoice also had a cash discount.

Fabrikam allows customers to take cash discounts on partial payments and also on credit notes (credit memos). A cash discount can be taken on a credit note when the credit note is issued for an invoice that the customer took a cash discount on. Instead of providing a credit for the full amount, you can credit the customer's balance for an amount that excludes the cash discount percent that the customer took. The settlement parameters are located on the Accounts receivable parameters page.

Invoice and credit note

Customer 4035 has an invoice for 1,000.00 and a credit note for 100.00. Each document has a 1 percent discount if it's paid in 14 days. Arnie can view this information on the Customer transactions page.

Voucher Transaction type Date Invoice Amount in transaction currency debit Amount in transaction currency credit Balance Currency
FTI-10050 Invoice 6/28/2020 10050 1,000.00 1,000.00 USD
CCRN-10050 Credit note 6/28/2020 CR-10050 100.00 -100.00 USD

Settle a credit note with an invoice

From the Customer transactions page, Arnie opens the Settle transactions page. Arnie can use the Settle transactions page to settle the invoice and credit note. As part of the settlement process, Arnie views the cash discount dates and amounts. Arnie marks the two documents and then clicks Post to settle the transactions. There is a discount of -1.00 on the credit note, because Fabrikam allows for discounts on credit notes.

Mark Use cash discount Voucher Account Date Due date Invoice Amount in transaction currency Currency Amount to settle
Selected Normal FTI-10050 4035 6/28/2020 7/28/2020 10050 1,000.00 USD 990.00
Selected Normal CCRN-10050 4035 6/28/2020 7/28/2020 CR-10050 -100.00 USD -99.00

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

  • Cash discount date: 7/12/2020
  • Cash discount amount: -1.00
  • Use cash discount: Normal
  • Cash discount taken: 0.00
  • Cash discount amount to take: -1.00

The settlement will be 100.00, and will include a payment of 99.00 and a discount of 1.00.