How to create Settlement Discount?

Settlement discounts allow you to automatically post a discount to a designated general ledger code when a customer pays early or qualifies for a reduced amount.

Follow the steps below to configure this functionality in iplicit.

1. Create a Settlement Discount General Ledger Code

If you do not already have a GL code for settlement discounts:

• Create a new General Ledger Code.
• Ensure the following options are ticked:
• Adjustment
• Charges
• Sale

This enables the code to be used correctly during receipt processing.

2. Add the GL Code to Account Defaults

Go to Account Defaults and:

• Locate the Charges section.
• Add the settlement discount GL code you created in Step 1.

This ensures all settlement discount postings are directed to the correct nominal.

3. Create a New Payment Method

Create a new Payment Method specifically for settlement discounts.

• Tick the Charges option.
• Add all required settlement discount percentages (e.g., 2%, 5%, etc.).
• You can create as many discount options as needed.

This payment method will control which discounts are available when processing receipts.

4. Add the Payment Method to the Relevant Bank Account

Navigate to the appropriate Bank Account and:

• Add the new payment method under Receipts.

This ensures the discount options appear when receipts are created against this bank.

5. Assign the Payment Method to Customers

For each customer eligible for settlement discounts:

• Open the customer record.
• Update their Payment Method to the one created in Step 3.

This ensures the discount options appear automatically when processing their payments.

6. Amend the Document Type settings

Open the Customer Receipt Document Type

• Tick the Allow Charges setting on the others tab

This will allow the function to appear on when creating the Receipt. 

7. Create a Receipt Against the Sales Invoice

Open the relevant Sales Invoice and:

• Create a Receipt.
• Select the bank account that has the new payment method assigned.

You will now see a Charges section appear automatically.

8. Apply the Settlement Discount

• Click Charges.
• Select the appropriate settlement discount percentage (e.g., 5%).

iplicit will:

• Mark the invoice as paid in full, and
• Automatically post the discount amount to the settlement discount GL code.

9. Review the General Ledger Movements

Once the receipt is posted:

• The settlement discount will appear as a separate posting to the GL code created in Step 1.
• The invoice will show as fully paid, with the discount correctly accounted for.