Early Settlement Discount - there's got to be a better way?

[michellepace]

Good morning,

Looking at my description of "How things get done now" I cannot believe that there is not a better way to do early settlement discounts. Can someone please tell me how to do early settlement discounts "automatically" in pastel, and, if it comes with any complications and/or difficulties?

How things get done now

1. We ensure our supplier statements amount = age analysis amount
2. Then we check our "Suppplier Discounts" spreadsheet to get the relevant discount % for a particular supplier
3. We manually calculate the discount and amount we're going to pay into our "Pay these amounts" spreadsheet
4. We pay the discounted amount
5. At the end of the month, we give the "Pay these amounts" spreadsheet to our lady doing the cashbooks. She then manually puts these discount amounts into the cashbook

There's got to be a better way. Can anyone shed light on it for me, and perhaps even tell me where to look in the installed help file?

Many thanks,
Michelle

[Kevin Smith]

First - setup early payment terms. Edit Terms - Early Payment Terms. Add your terms - eg 2.5% 30 days from last day of period (or invoice date, etc).
Next - edit Supplier account - on the processing tab - select the Early terms relevant to that supplier.
In process Cashbooks - select the setting button, and tick the checkbox "Allocate Settlement Discount"
Process the line to the supplier (Date, Acc number, Reference and description) - do not enter any amounts. Press F3 to invoke the open item matching box. Click the "Show all invoices" button at the bottom. Tick off the invoices you wish to pay - you will see there is a settlement discount allocated according to their terms. When you have selected all the invoices you were paying, click the close button. Tha cashbook will now update with the amount you were paying, as well as the settlement discount amount.
Careful - it wont do automatic discount allocations if an entry has multiple allocations on it, ie you invoiced, then linked a partial credit to that invoice, or paid half the invoice already and there is a partial payment left - but otherwise, it works quite well.

[michellepace]

Hi Kevin,

Thanks very much for you reply. I have attempted to follow your instructions, but have a few questions if you don't mind:

Q1. My suppliers are all on Balance Forward, am I correct that for Early Settlement calculatations I would first need to switch them to Open Item?

Q2. "do not enter any amounts..." We import our bank statements for doing the cashbooks. So there will always be a value in the amount field. Will I still be able to press F3 if I have a value in the amount field? That is, will allocating a discount still work?

Q3. As I understand it, your method described above helps me allocate a discount once payment has been done. However, I also need to know the NETT amount of money to pay my suppliers come the end of the month. I usually just look at our age analysis (and work out the discount manually). Can Pastel somehow tell me the NET amount I have to pay (ie excluding my discount) come end of the month?


Thanks very much Kevin, (and anyone else who may chime in), if I can get this right it is going to save me a whole lot of time and avoid many typing/calculator errors!

[Kevin Smith]

Q1- Yes - you would need to switch them to open item.
Q2 - No - you will have to delete the amount in the line, then got through the discount allocation process, and confirm the "final" amount paid after selecting the discounts agrees back to the amount on your cashbook import.
Q3 - No - not as a standard report. You would need to have a SI report written to give you those figures /age analysis.

It would probably be easier to write a report that extracts the settlement discount you have taken and creates a cashbook batch for you to import, as discount only, based on the way you are currently processing.