The advantage of a Trade Discount versus a standard Discount
when payment is received within the discount days, is that when the
trade discount is given at receipt of payment, special adjusting
entries are automatically generated to the General Ledger to
account for the reduced rental revenue, damage waiver, and taxes by
the discounted amount.
This ensures that Sales History and Monthly Revenues accurately
reflect the discount given.
Note: Trade discounts cannot be used if your firm uses split billings.
Time-Based Discounts are NOT eligible for Trade Discounts as
well.
For details on the Time-Based Discount feature, refer to Time-Based Discounts in the Divisional Rate Parameters.
Note: Because the Trade Discount % is specified for each customer in the Customer Information, the Discount % set in the Terms Codes not used.
Note: A customer can be allowed both a trade discount percent given at receipt of payment, and a regular rental discount percent given when the products are entered on the document, and this will "double up" the discount.
To view or change the trade discount percentage on a contract or
reservation, in the Totals screen window on the "Amt of
Deposit" field and again on the Trade Discounts prompt in
the sub-menu.
This trade discount will be carried forward to the invoices
produced from this document.
To view or change the trade discount percentage on a rental
quotation, in the Totals screen, window on the Enter to
Continue prompt.
No Trade Discount will be given on a rental product under the following conditions:
Note: Once the Trade Discount is disallowed on a product detail
on a contract, reservation, or quotation, it will NOT be reinstated
even if the restricting factor is changed.
To re-instate a Trade Discount, the product detail line must be
deleted and re-entered.
The Trade Discount flag for the product is displayed in the
expanded invoice detail record. This can be changed if
required.
The Trade Discount % can be viewed and changed in the invoice
Totals window, in the window at the "On Acct" prompt.
The invoice Totals window will show the current terms code.
If the invoice has no rentals on it, the counter staff should
change the terms code to another code (e.g. Net 30) to reflect that
the discount does not apply.
The invoice totals do not reflect the Trade Discount amount,
since this discount amount only applies if the invoice is paid by
the Discount Date.
The invoice will post to the General Ledger as if it were a
standard invoice. If the customer pays on time and is given the
discount during payment, the software program makes posting
adjustments at that time for the trade discount.
The Trade Discount reminder prints near the bottom of the invoice
as a note with the Due Date, the Discount Date, and the potential
Discount amount.
If the Trade Discount applies in Customer
Payments, a window opens displaying the Trade Discount
Information based on the rentals, damage waiver and taxes only
for that invoice.
The option is provided to accept the discount as a Trade Discount
or process it as a standard discount.
If the trade discount does not apply, then the window does not
open.
Note: The discount amount can only be over-typed on standard discounts.
In the Monthly Product History and Detailed Revenue History the original invoice record shows as reversed on the day of the payment, and then as re-entered with the discounted charge, to correctly reflect the Trade Discount given on each product.
Note: If a customer payment with a trade discount on it is reversed, the credit invoice for the trade discount is NOT automatically reversed. The credit invoice must be manually reversed.
G/L Account Description Acct# Distribution Amount Credit Accounts Receivable 1200 $150.00 (invoice paid in full) Debit Trade Discount Clearing 4831 22.50 (Trade Discount 15%) Debit Method of Payment Account 1100 127.50 (Customer's Payment Amount) Debit Prod Class Trade Discount 4835 18.29 (15% of $121.90 rental charge) or Class Revenue Acct (4000) Debit Damage Waiver 4160 1.28 (15% of $ 8.53 damage waiver) Debit Tax 1 2200 1.37 (15% of $ 9.13 total tax 1) Debit Tax 2 2210 1.56 (15% of $10.43 total tax 2) Credit Trade Discount Clearing 4831 22.50 (clears debit to Trade Discount)Note: The posting of the Trade Discount credit invoice uses the same date as the payment.
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