Setting Up Early Payment Discount

Setting Up Early Payment Discount

How do I set up the early payment discount and days to discount in payables (Bill Payments) and receivables (Cash Receipts)?

To use the early payment discount feature, it must first be enabled in the Admin Panel under General Settings. Once enabled, two additional fields will appear in the payment term: Discount Percentage field and number of days (the 'If paid within [] days' field). The number of days will represent the period from the date of the document during which the discount will be honored. If the receipt or payment qualifies for the early payment discount, it will be automatically calculated when creating the Cash Receipt or Bill Payment.



Enabling Discounts in Cash Receipts and Bill Payments

To enable early payment discounts:
  1. Go to Admin Panel > General Settings.
  2. Check the 'Discounts in Cash Receipts and Bill Payments' checkbox in the 'Other' section.



How Early Payment Discounts Work on Cash Receipts and Bills

When a Payment Term includes an early payment discount, such as Net 15, 5%/5 (where the full payment is due in 15 days and a 5% discount applies if payment is made within 5 days), the discount is automatically applied when processing the Cash Receipt or Bill Payment.

For example, with the Net 15, 5%/5 applied:
  • If the customer pays within 5 days, a 5% discount is automatically calculated and displayed in the Discount column on the Cash Receipt screen.
  • After the 5-day discount period, the customer must pay the full invoice amount by the 15-day due date.




    You will see the discount applied automatically as shown in the screenshot below:


This feature helps streamline the payment process and encourages early payments by offering automatic discounts. Please refer to Payment Terms for instructions on how to configure the payment term.

    • Related Articles

    • Discounts

      Discounts may be applied to Sales Documents in CustomBooks™ in several ways: On the order total as a percentage or a flat amount; On the individual lines on a sales document; On the cash receipt Applying a Discount on the Order Total To apply a ...

    • Payment Terms in CustomBooks™

      Payment Terms Payment Terms are the agreed-upon conditions between a buyer and seller that specify when a payment for goods or services is due. These terms define the period within which payment must be made, any early payment discounts, and ...

    • Cash Receipts

      Overview A cash receipt document is used to record payments received in cash or through other payment methods like checks or electronic transfers. Properly creating and maintaining cash receipts ensures accurate tracking of payments and helps with ...

    • Refund Receipts

      A Refund Receipt document in CustomBooks™ is used to record the receipt of funds from a vendor, such as a refund for a returned product or an overpayment. This document is generated after creating a Vendor Refund to acknowledge and track the actual ...

    • Voiding Payment Entries (Cash Receipts, Payments, Bill Payments)

      Voiding payment entries is an essential task for maintaining accurate financial records in any business. Whether correcting an error, responding to a customer request, or handling a duplicate entry, voiding payments ensures the accuracy of your ...