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.

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