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Scenario: Use one customer payment to settle multiple invoices that span multiple discount periods [AX 2012]

Updated: October 12, 2011

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

Fabrikam sells goods to customer 4032. Fabrikam offers a cash discount of 1 percent if the invoice is paid in 14 days, and also offers cash discounts on partial payments. For information about these setup parameters, see About parameters for settlements in Accounts receivable and Accounts receivable parameters (form).

Customer 4032 has three invoices:

  • Invoice FTI-10040, for 1,000.00, was entered on May 15. This invoice is eligible for a cash discount of 1 percent if it is paid in 14 days.

  • Invoice FTI-10041, for 1,000.00, was entered on June 25. This invoice is eligible for a cash discount of 1 percent if it is paid in 14 days.

  • Invoice FTI-10042, for 1,000.00, was entered on June 25. This invoice is eligible for a cash discount of 2 percent if it is paid in five days, and 1 percent if it is paid in 14 days.

If Arnie creates a payment journal to fully settle these invoices on June 29, the payment would be 2,970.00. The total of all discount amounts would be 30.00.

Arnie opens the Accounts receivable Payment journal form. He creates a journal, and then clicks Lines. In the Account field, he selects customer 4032, and then clicks Functions > Settlement. In the Settle open transactions form, Arnie selects the Mark check box for all three invoice lines.

  • The payment for invoice FTI-10040 would be 1,000.00, with no cash discount.

  • The payment for invoice FTI-10041 would be 990.00, with a cash discount of 1 percent, or 10.00.

  • The payment for invoice FTI-10042 would be 980.00, with a cash discount of 2 percent, or 20.00.

Mark

Use cash discount

Voucher

Account

Date

Due date

Invoice

Amount in transaction currency debit

Amount in transaction currency credit

Currency

Amount to settle

Selected

Normal

FTI-10040

4032

5/15/2015

6/15/2015

10040

1,000.00

USD

1,000.00

Selected

Normal

FTI-10041

4032

6/25/2015

7/25/2015

10041

1,000.00

USD

990.00

Selected and highlighted

Normal

FTI-10042

4032

6/25/2015

7/25/2015

10042

1,000.00

USD

980.00

Discount information for invoice FTI-10042 is shown at the bottom of the Settle open transactions form.

Cash discount date

7/4/2015

Cash discount amount

20.00

Use cash discount

Normal

Cash discount taken

0.00

Cash discount amount to take

20.00

The customer balance is 0.00.

If Arnie creates a payment journal to fully settle these invoices on July 1, the payment would be 2,980.00.

Arnie opens the Accounts receivable Payment journal form. He creates a journal, and then clicks Lines. In the Account field, he selects customer 4032, and then clicks Functions > Settlement. He selects the Mark check box for all three invoice lines.

  • The payment for invoice FTI-10040 would be 1,000.00, with no cash discount.

  • The payment for invoice FTI-10041 would be 990.00, with a cash discount of 1 percent, or 10.00.

  • The payment for invoice FTI-10042 would be 990.00, with a cash discount of 1 percent, or 10.00. Although July 1 is after the period for the 2 percent discount, it is still in the period for the 1 percent discount.

Mark

Use cash discount

Voucher

Account

Date

Due date

Invoice

Amount in transaction currency debit

Amount in transaction currency credit

Currency

Amount to settle

Selected

Normal

FTI-10040

4032

5/15/2015

6/15/2015

10040

1,000.00

USD

1,000.00

Selected

Normal

FTI-10041

4032

6/25/2015

7/25/2015

10041

1,000.00

USD

990.00

Selected and highlighted

Normal

FTI-10042

4032

6/25/2015

7/25/2015

10042

1,000.00

USD

990.00

Discount information for invoice FTI-10042 is shown at the bottom of the Settle open transactions form.

Cash discount date

7/13/2015

Cash discount amount

10.00

Use cash discount

Normal

Cash discount taken

0.00

Cash discount amount to take

10.00

Customer 4032 can pay a partial amount, such as half of each invoice.

Arnie opens the Accounts receivable Payment journal form. He creates a journal, and then clicks Lines. He enters the payment date, and then clicks Functions > Settlement, so that he can mark payments for settlement. On each line, he enters the amount to settle. When a line is selected, Arnie sees the discount amount for that line and the discount amount that is taken. Because the customer is paying half of the invoice, Arnie sees that the value in the Cash discount amount field for FTI-10042 is 20.00, but the value in the Cash discount taken field is 10.00. The payment amount is 1,485.00.

Mark

Use cash discount

Voucher

Account

Date

Due date

Invoice

Amount in transaction currency debit

Amount in transaction currency credit

Currency

Amount to settle

Selected

Normal

FTI-10040

4032

5/15/2015

6/15/2015

10040

1,000.00

USD

500.00

Selected

Normal

FTI-10041

4032

6/25/2015

7/25/2015

10041

1,000.00

USD

495.00

Selected and highlighted

Normal

FTI-10042

4032

6/25/2015

7/25/2015

10042

1,000.00

USD

490.00

Discount information for invoice FTI-10042 is shown at the bottom of the Settle open transactions form.

Cash discount date

7/4/2015

Cash discount amount

20.00

Use cash discount

Normal

Cash discount taken

0.00

Cash discount amount to take

10.00

If Arnie manually creates a payment journal for 1,485.00, clicks Functions > Settlement, and then marks all three transactions, and Arnie does not adjust the value in the Amount to settle field for each transaction when he closes the form, the following message will be displayed:

The total amount of marked transactions is different from the journal amount. Change journal amount?

If Arnie wants the payment amount to be only 1,485.00, he clicks No, and then posts the journal. The transactions are settled as follows:

  • Invoice FTI-10040 is fully settled for 1,000.00, because it was entered on May 15, and it is the oldest invoice. No cash discount is taken. The remaining amount on the payment transaction is 485.00.

  • Invoice FTI-10041 is not settled at all. Invoices FTI-10041 and FTI-10042 were entered on the same date. However, a 1 percent discount is available to invoice FTI-10041, and a 2 percent discount is available to invoice FTI-10042. Because a better discount is available to invoice FTI-10042, the remaining 485.00 is settled with invoice FTI-10042.

  • Invoice FTI-10042 is settled with the remaining 485.00. Fabrikam offers partial discounts. Because the invoice had a 2 percent discount, the customer pays 98 percent of the invoice. The discount is 9.90 (485.00 / 0.98 * 0.02). The amount is divided by 0.98, because there is a 2 percent discount, so that the customer pays 98 percent of the invoice. The result is then multiplied by the discount percentage, or 2 percent. The payment of 485.00 plus the discount of 9.90 is 494.90. The amount of the original invoice was 1,000.00. Therefore the transaction has a balance of 505.10, which is 1,000.00 – 494.90.

    Arnie views the information in the Customer transactions form.

Voucher

Transaction type

Date

Invoice

Amount in transaction currency debit

Amount in transaction currency credit

Balance

Currency

FTI-10040

Invoice

5/15/2015

10040

1,000.00

0.00

USD

FTI-10041

Invoice

6/25/2015

10041

1,000.00

1,000.00

USD

FTI-10042

Invoice

6/25/2015

10042

1,000.00

505.10

USD

ARP-10040

6/29/2015

1,485.00

0.00

USD

DISC-10040

6/29/2015

9.90

0.00

USD

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