Table of Contents

Overview

Discounts

Depending on company business practices, a discount or allowance may be used when the customer’s check is less than the invoice being paid.  Typically, if the customer’s terms allowed for an early payment discount, the difference would be put in the discount column.  This will then post to the Sales Discount account in the General Ledger.  If there was no early payment discount, post only the amount of the check and leave the invoice balance open for further payment or post the shortage to the allowance column, which will post it to the Allowance account in the General Ledger.

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AR > Cash Receipts > Enter Cash Receipts

Applying a Discount

1. To utilize the discount function you will first have to enter your cash receipt as normal, making sure there is a check amount applied to the check amount box.  Continue as normal until you get to the “Apply to” field in the middle of the screen.

2. You can either double click on the invoice from the open invoice section of the screen or type in the invoice and all of its information will populate in automatically.  It will also apply the full amount to the check and leave the remaining in the unapplied balance field for later use. 

3. Notice in the example above the cash receipt is for $12.00 but the invoice is for $16.05, in this scenario the difference would be discount that the customer is claiming.  To handle this you apply the $4.05 to discount amount filed on the Discounts tab.  The total applied field will now recalculate to $16.05.  This would credit out the whole invoice.
   
   

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4. After completing the cash receipt it can be saved for processing by pressing the F10 button or save icon. 

Allowances

Every now and then (and hopefully not too often) a customer will short pay you on an invoice and you will choose to just write it off.  The following procedure will allow you “write off” the differences and close the invoice off the customer account.

AR > Cash Receipts > Enter Cash Receipts

Giving an allowance or write off

1. To write off the balance of your invoice in the cash receipt screen you will have to enter your cash receipt as normal, making sure there is a check amount applied to the check amount box.  Continue as normal until you get to the “Apply to” field in the middle of the screen.

2. You can either double click on the invoice from the open invoice section of the screen or type in the invoice and all of its information will populate in automatically.  It will also apply the full amount to the check and leave the remaining in the unapplied balance field for later use or editing.

3. If a customer short pays you and you choose not to let the balance ride and write off the invoice you will have to add the unpaid amount into the “allowance” section of the discount tab.  The total applied will now reflect the change and equal the balance due on the invoice.
   
   

4. After completing the cash receipt it can be saved for processing by pressing the F10 button or save icon.