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Scenario: Cash discount handling for overpayments [AX 2012]

Updated: October 15, 2014

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

To specify how an obtainable cash discount difference is treated when an invoice is over paid, use the Cash discount administration and Maximum overpayment or underpayment fields in the Accounts receivable parameters form. An invoice is considered over paid when the payment amount is greater than the invoice amount less the cash discount.

In the following example, the customer has overpaid the invoice by 0.50.

Invoice total

Cash discount available

Amount to be paid, which includes the cash discount

Amount the customer actually pays

105.00

10.50

94.50

95.00

The full cash discount is taken when the Specific field is selected in the Accounts for automatic transactions form. The overpayment amount is either posted to a cash discount difference ledger account or remains a balance on the customer’s account. This is determined by whether the overpayment amount is between 0.00 and the amount that is entered in the Maximum overpayment or underpayment field or if the overpayment amount is over the Maximum overpayment or underpayment amount.

Scenario 1: Overpayment amount is between 0.00 and the maximum overpayment or underpayment. An invoice is entered for 105.00 with a cash discount available if the invoice is paid within seven days.

Invoice total

Cash discount available

Amount to be paid, which includes the cash discount

105.00

10.50

94.50

The customer submits a payment for 95.00. The payment is settled against the invoice for 105.00. After the invoice and payment are settled, the following transactions will be created in Account receivable for the customer.

Transaction

Amount

Balance

Invoice

105.00

0.00

Payment

-95.00

0.00

Cash discount

-10.50

0.00

The following accounting entries are generated for the payment and settlement.

Payment

Account

Debit amount

Credit amount

Cash

95.00

Accounts receivable

95.00

Settlement

Account

Debit amount

Credit amount

The account that is specified in the Main account for customer discounts field in the Cash discounts form

10.50

Accounts receivable

10.50

The account that is specified in the Customer cash discount field in the Account for automatic transactions form

0.50

Accounts receivable

0.50

Scenario 2: The overpayment amount exceeds the maximum overpayment or underpayment amount. An invoice is entered for 105.00, with a cash discount available if the invoice is paid within seven days.

Invoice total

Cash discount available

Amount to be paid, which includes the cash discount

105.00

10.50

94.50

The customer submits a payment for 95.00. The payment is settled against the invoice for 105.00. After the invoice and payment are settled, the following transactions will be created in Account receivable for the customer.

Transaction

Amount

Balance

Invoice

105.00

0.00

Payment

-95.00

-0.50

Cash discount

-10.50

0.00

The overpayment amount of 0.50 will remain as an open balance on the payment and can be settled against another invoice.

The following accounting entries are generated for the payment and settlement.

Payment

Account

Debit amount

Credit amount

Cash

95.00

Accounts receivable

95.00

Settlement

Account

Debit amount

Credit amount

The account that is specified in the Main account for customer discounts field in the Cash discounts form

10.50

Accounts receivable

10.50

In the Accounts for automatic transactions form, when Unspecific is selected in the Cash discount administration field, the cash discount amount is reduced by the overpayment amount. This is true regardless if the overpayment amount is over or under the amount entered in the Maximum overpayment or underpayment field.

Scenario 3: An invoice is entered for 105.00, with a cash discount available if paid within seven days.

Invoice total

Cash discount available

Amount to be paid, which includes the cash discount

105.00

10.50

94.50

The customer submits a payment for 95.00. The payment is settled against the invoice for 105.00. After the invoice and payment are settled, the following transactions will be created in Account receivable for the customer.

Transaction

Amount

Balance

Invoice

105.00

0.00

Payment

-95.00

-0.00

Cash discount

-10.00

0.00

The cash discount amount is reduced from 10.50 to 10.00. The payment and invoice are considered settled.

Payment

Account

Debit amount

Credit amount

Cash

95.00

Accounts receivable

95.00

Settlement

Account

Debit amount

Credit amount

The account that is specified in the Main account for customer discounts field in the Cash discounts form

10.50

Accounts receivable

10.50


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