The payment discount tolerance feature allows you to grant a payment discount after the payment discount date has passed.
If you accept a payment discount after the payment discount date, it will always be posted to either the payment discount account or a payment tolerance account.
You specify the method for posting payment discount date tolerance in the G/L Setup.
The payment tolerance feature offers you the following capabilities:
Every outstanding amount has a set max payment tolerance allowed.
If the criteria for payment tolerance is met and the payment amount is an underpayment, the outstanding amount will be fully closed by the underpayment. The program posts a detailed ledger entry to the payment entry so that there is no remaining amount left on the applied invoice entry.
If the criteria for payment tolerance is met and the payment amount is an overpayment, a new detailed ledger entry will be posted to he payment entry so that there is no remaining amount left on the payment entry.
A single document will have the same tolerance possibilities whether it is applied on it’s own or with other documents. Automatic acceptance of a late payment discount in multiple document applications will automatically occur for each document where:
payment discount date < payment date (on the focus entry) <= payment tolerance date
This rule will also reply when determining whether to show a warning in multiple applications or not. The program will display the payment discount tolerance warning for each entry within the application that satisfies the date criteria above.
You can choose to receive a warning form with changing text depending on the tolerance situation:
The first warning text relates to the Payment Discount Tolerance. Your will be informed that you can accept a late payment discount. The user will then select whether to accept tolerance on the discount date or not.
The second warning text relates to the Payment Tolerance. The user will be informed that all entries can be closed since the difference is within the sum of the maximum payment tolerance for the applied entries. The user will then select whether to accept tolerance on the payment amount or not.
Setting Up Tolerances
Blocking Customer or Vendor Tolerances
Activating or Deactivating Payment Tolerance Warning
Change Payment Tolerance
Example - Tolerance Calculations for Single Document
Example - Tolerance Calculations for Multiple Document