The use and logic behind "Calc. Pmt. Disc. on Cr. Memos"

knm

Hi I'm trying to understand the use and logic behind "Calc. Pmt. Disc. on Cr. Memos" field available on Payment Terms Code table.

In real life would you ever Discount the Credit Memo amount? I can't think of a good scenario...

Also, I'm testing using NAV 2009, but can't seem to figure out how the "Calc. Pmt. Disc. on Cr. Memos" functions in NAV. Does NAV automatically give discount to when applied to an invoice within the Due Date?

I would greatly appreciate your advises.

Thank you!

jglathe

Hi,

kenji wrote:

Hi I'm trying to understand the use and logic behind "Calc. Pmt. Disc. on Cr. Memos" field available on Payment Terms Code table.

this was a requirement often named by customers, AFAICR. It is for the business cases where lots of credit memos are generated, which impact the resulting amount to be paid. Worst case: a full refund without payment discount, paid fast. This would result in a payment to the customer above what he has paid... The logic behind is "Payment terms apply for the resulting amount due, regardless of how many invoices/credit memos have been sent". It is also a VAT thing AFAIK... payment discount lessens the VAT amounts to be paid. You can't credit more VAT then you have got for the same goods/service, or you would draw money from the fiscal authority.

with best regards

Jens

knm

Hi Jens,

Thank you for your response.
I'm still having hard time understanding how Payment Discount can be made on Credit Memos.

Here is a scenario that I'm thinking right now, and please correct me if I'm on the right track.

1) 1/1/2011: Post Sales Invoice of $100.00 with Payment Terms of 2/10 Net 30 Days
2) 1/8/2011: Post full Cash Receipt in NAV. (discount of $10.00 is applied)
3) 1/15/2011: Customer reports defect in the shipped item, so issue Credit Memo of $100.00 in NAV with Payment Terms of 2/10 Net 30 Days.
4) 1/31/2011: Credit Memo is applied to different Open Invoice.

At 4), if the Posting Date is within 10 days after 1/15/2011, then the Credit Memo is discounted?

Thank you.

jglathe

Hi kenji,

yes I think so. Sounds strange, though... practically you would set a different payment discount date to make sure the discount is drawn on the next payment run (or so).

with best regards

Jens

knm

Hi Jen,

Thank you for your response.
I was testing the scenario that I mentioned, but have found out that the discount was not automatically calculated at all... So I figured that it had to be some sort of payment to the Customer instead of applying off an Invoice.

So I basically created a Refund Payment to customer for the Credit Memo that I issued, and the discount got automatically calculated!

I'm sure I won't be needing this functionality, but it's good to clear out how this function works!

Thank you for your guidance!

Best Regards,

Kenji