Prompt Payment Discount (Sales Discount)
Software: MoneyWorks #accounting software
A Sales Discount (or Cash Discount) is a discount given at the point of payment. It encourages prompt payment and helps in cash flow management. Example, you give a 10% discount for invoices which has paid within the payment terms or earlier.
To help in managing the accounts receivable, you can set a “Prompt Payment Discount” in the Pricing & Terms tab of the debtor profile. Once the perimeter has setup, MoneyWorks will calculate the validity of the invoices that are enjoying the discount when payment received.
Assuming you have set the prompt payment discount as within 30 days at 10% discount. When an invoice has recorded on 1 June 2016, the customer enjoys a 10% discount if he paid before 1 July 2016 (within 30 days from the invoice date).