Need info on Cash discounts

[Former Member]

Hello,

I need some info on cash discounts.

I understand that cash discounts are applicable to the customer after he makes the payment. We issue credit memo.

But i dont understand the link b/n cash dicount conditon type (say SKTO/SKTV and payment terms )

How the cash discounts are linked to payment terms?

Whats the setting done for this?

Could some one answer this?

Regards,

Krishna

[Former Member]

Cash discount means the rate of cash discount.

Where do you find the details of how much cash discount to be given to the customer ?

It is stored in the "Payment Term".

Any organisation has got its Payment Term or Terms of Payment for the business.

For example,suppose to-day you have purchased some goods from me and I have a payment term in my organisation like below,

If you are paying me within 7 days,then you are eligible for 5% cash discount.

If you are paying me within 15 days, then you will get 2% cash discount.After this no cash discount and 30 days is the maximum credit days and within 30 days if you are not paying me , then I will charge suppose 20% interest on the amount from the 31st day onwards.

System gets this information regarding the Cash discount, from this Payment Term.

For Cash discount , there is a special condition type "SKTO". This is a statistical condition type. Condition type SKTO retrieves the cash discount rate to be given, from the Payment Term.

Condition type SKTO does not have any access sequence and its finds out the cash discount rate from the payment in the Table "T052" (in this table all cash discounts are stored).

To find this cash discount rate SKTO uses its condition category "E".

[Former Member]

Hello Mohan

SKTO is a special condition type used strictly for this scenario i.e based on which payment term discount should be applicable. This condition type is not passed to accounting and generally not to COPA either (as you can see no ACT keys for this condition type is not maintained in the Pricing Procedure)

The condition category E cash (in V/06) discount tells the system to go get the payment terms and calculate the potential/actual value i.e. 10% within 21 days and 5% within 30 days.

Based on the differing payment terms while payment, Invoice value will not change and would be the same, but SKTO will correct the value and discount is calculated in A/R instead.

The discount is applied on posting of the invoice and an error will be raised if the payment amount does not equal the net - the calculated cash discount. In the above case, if the payment is within 30 days, then system will throw an error if the customer takes 10 % instead of 5%.

Hope this helps.

Kalpesh

[Former Member]

Hi ,

In SO we has discount. If customer pays by due date no action required. But if customer pays after due date / misses the payent term we need to debit/charge the late paymnet charges equal to the cash discount. How can we configure this functionality.

Kindly help

Thanks

[Former Member]

Hi Kalpesh,

I am using the same condition type. but the problem is that it is taking discount twice, i.e. it deducts amount from the invoice so a 5% discount there and while making payments it again takes 5% discount .. so customer is getting double discount.

How can we stop this.

Regards,

Puneet Makkar