Early Payment Discounts (EPDs) are discounts given to customers when they pay for their invoices prior to the invoice due date. You specify when an EPD takes effect and the discount rate to offer.
EDPs can be based on Due Date (payment made 10 days before it's due) or based on Invoice Date (payment made within 10 days of being billed).
You can also specify multiple EPDs. For example, if a customer pays 15 days before the due date they get a 5% discount, if they pay 10 days before they get a 3% discount, and if they pay 5 days before they get only a 1% discount.
Not all products need to be eligible for an EPD nor use the same EPD default rates. Discounts will be offered only on specified products, and each product can have a custom discount rate (EPD override rate). If Blends are eligible for EPDs, the EPD is calculated based on the price of entire blend and not the individual products in a blend.
Not all invoices need to offer an EPD. You can add, change or delete an EPD on a per invoice basis.
Use the AR Invoice EPD Applied data export to view the EPD amounts applied to invoices.
Note
Early payment discounts do not apply to taxes or interest charge items.
There are five processes involved in setting up early payment discounts:
defining the EPD types
defining the EPD rates
defining the EPD GL Accounts
flagging products as EPD-eligible (and optionally setting an EPD override rate)
(optional) flagging customers as EPD-elgible (using customer characteristics)
What you'll find:
Use the Manage Early Payment Discount Types window to add, edit, deactivate or activate, and remove early payment discount types.
The Manage Early Payment Discount Types window consists of the following tabs:
You can offer multiple of early payment discount types with varying dates for when they apply. For example, an early payment discount may apply if an invoice is paid five days before its due date, and a 'very early' payment discount may apply if an invoice is paid ten days before its due date.
What you'll find:
Specify the types of early payment discounts that you want to offer customers.
To add an early payment discount type
* indicates a required field
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD Types.
The Manage Early Payment Discount Types window opens.
Offer Early Payment Discount (EPD): if checked the specified early payment discounts are automatically offered on invoices.
(can be overridden on the fly)
Omit Blends from Calculation: if checked blends are NOT eligible for Early Payment Discounts regardless of the eligibility of the individual commodities.
Payment: Calculate on Outstanding Amount (as opposed to calculate on the Original Chargeable amount): if checked, on the Accept Payments window Pro-Rate EPD is unchecked by default; EPD is calculated on outstanding amount only.
(can be overridden on the fly)
New Products: Default EPD: if checked new products will be EPD-eligible by default.
(can be overridden on the fly)
Apply EPD Chargeback for Returns: if checked automatically add the Chargeback Product with calculated EPD to the return invoice
(can also add chargeback product to any invoice invoice on the fly and price EPD amount manually)
Select a non-inventory Chargeback Product* (you may need to add one - it can post to the same GL as the early payment discounts, or to a separate one).
This product will be added automatically to return invoices with a negative price (which on the returns tab equals a charge) to subtract the original early payment discount from any returned funds.
Caution
There are exclusions to EPD returns - fuel invoices , and grain invoices.
Please contact your CSC for more details.
Decide if you want to offer EPDs based on:
Days before Due Date
(example: the customer gets a discount if they pay 10 days before the due date)
Days after Invoice Date
(example: the customers gets a discount if they pay within 10 days after the invoice date)
In the Description column, enter a unique description for the early payment discount.
This description appears anywhere that you select or view an early payment discount type.
In the Number of Days column, enter the number of days before the invoice due date that invoices must be paid in order for the early payment discount to apply.
For example, if a discount should apply to invoices that are paid ten days prior to their due dates, then “10” should be entered in the Number of Days column. Each early payment discount type must be associated with a different number of days; duplicates are not permitted.
If the EPD type should be offered to certain customers only, select a Customer Characteristic.
Ensure the Active check box is selected.
Active is selected by default after the description has been entered.
Active types are listed before non-active.
Tip
Add all early payment discount types before clicking Save since saving also closes the window.
Note
You're not quite done yet. In order to use the early payment discounts, you also need to set up the early payment discount rates and early payment discount GL accounts.
Click Save.
You can edit any of your existing early payment discount types at any time. You can also change the active status.
To edit an early payment discount type
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD Types.
The Manage Early Payment Discount Types window opens.
Change the relevant information by typing directly in the table.
Click Save.
When you add early payment discount types, the default setting is active, but you can also activate early payment discounts that have been deactivated.
When an early payment discount type is deactivated, you can still reference the discount on existing invoices and Invoice reports that reference the discount, but you cannot use the discount on new invoices.
To deactivate an early payment discount type
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD Types.
The Manage Early Payment Discount Types window opens.
In the Active column, clear the Active check box of the early payment discount you want to deactivate.
Click Save.
To activate an early payment discount type
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD Types.
The Manage Early Payment Discount Types window opens.
In the Active column, select the Active check box of the early payment discount you want to activate.
Click Save.
Removing an early payment discount type deletes it from the database.
To remove an early payment discount type
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD Types.
The Manage Early Payment Discount Types window opens.
In the Description column, select the early payment discount type to remove.
Click Remove Early Payment Discount Type.
Note
If the Remove Early Payment Discount Type button is not available, the discount you selected has been used or is in use on an invoice and cannot be removed.
Click Yes to confirm the removal.
The early payment discount type is removed.
Click Save.
Use the Manage Early Payment Discount Rates window to add, edit, and delete early payment discount rates. You can offer different discounts at each location in your company. In order to use the early payment discounts, you must apply the early payment discount rates to the early payment discount types.
What you'll find:
Specify the discount rates for early payment discounts that you want to offer customers.
To add an early payment discount rate
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD Rates.
The Manage Early Payment Discount Rates window opens.
In the Discount Rate% column, enter the discount percentages for the locations and EPD types that offer a discount.
Tips
If you want to offer the same EPD type discount for all locations, enter the discount percentage in the Discount Rate% column for <Company>. If you only have one location, <Company> is hidden.
Add all early payment discount rates before clicking Save since saving also closes the window.
Note
In order to use the early payment discounts, you need to set up the early payment discount GL accounts.
Click Save.
You can edit any of your existing early payment discounts rates at any time.
To edit an early payment discount rate
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD Rates.
The Manage Early Payment Discount Rates window opens.
In the Discount Rate% column, change the discount percentages for the locations and EPD types that offer a discount.
Note
If you had specified an EPD type rate at the <Company> level (all locations use the same discount rate), change the discount percentage in the Discount Rate% column for <Company>. If you only have one location, <Company> is hidden.
Click Save.
Deleting an early payment discount rate deletes it from the database.
To delete an early payment discount rate
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD Rates.
The Manage Early Payment Discount Rates window opens.
In the Discount Rate% column, delete the discount percentages for the locations and EPD types that no longer offer a discount.
Note
If you had specified an EPD type rate at the <Company> level (all locations use the same discount rate), delete the discount percentage in the Discount Rate% column for <Company>.
If you only have one location, <Company> is hidden.
Click Save.
Use the Early Payment Discount GL Accounts window to add, edit, and remove early payment discount GL accounts. The early payment discount funds are drawn from the selected GL accounts. You can choose to use the same GL account for all locations that have the same early payment discount or choose to use several GL accounts (e.g., per location). In order to use the early payment discounts, you must associate GL accounts with the early payment discount types and rates.
When adding early payment discount GL accounts, you must specify default GL accounts that are automatically selected on invoices; however, you can change the GL accounts directly on invoices.
What you'll find:
Specify the GL accounts that you want to associate with the early payment discounts.
To add an early payment discount GL account
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD GL Accounts.
The Manage Early Payment Discount GL Accounts window opens.
(Config U) In the Location box, enter a location that you want early payment discount GL accounts to be associated with.
Each location can use a different GL account.
Tip
If you want the same GL accounts to be available at all locations, select <Company> from the list. If you only have one location, <Company> is hidden.
Click Retrieve GL Accounts.
A GL Account list appears.
In the GL Account column, select GL accounts for the early payment discounts to be applied to.
The early payment discount funds are drawn from the selected GL accounts. You can add several GL accounts to the list.
In the Default? column, select the Default? check box of the GL account you want the early payment discounts to automatically be applied to on new invoices.
A default is required, and only one GL account can be the default. Invoices automatically use the default you select, but you can change the GL account directly on the invoice.
Notes
When an early payment discount is applied, funds from the selected GL account are applied to the customer’s account.
In order to use the early payment discounts, you need to set up the early payment discount types and early payment discount rates.
Click Save.
You can edit any of your existing early payment discount GL accounts at any time. Edits do not affect existing invoices that have early payment discount GL accounts specified.
To edit an early payment discount GL Account
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD GL Accounts.
The Manage Early Payment Discount GL Accounts window opens.
(Config U) In the Location box, enter the location that you want to edit its early payment discount GL accounts.
Note
If you had specified GL accounts at the <Company> level (all locations use the same GL accounts), select <Company> to change the GL accounts for all locations. If you only have one location, <Company> is hidden.
Click Retrieve GL Accounts.
A GL Account list appears.
In the GL Account column, change the GL accounts that the early payment discounts are applied to.
In the Default? column, change the Default? check box to a different GL account that you want the early payment discounts to automatically be applied to on new invoices.
Click Save.
Removing an early payment discount GL account makes it unavailable to use on new invoices; however, existing invoices are not affected.
To remove an early payment discount GL account
Navigate to Accounts Receivable > Manage > Early Payment Discounts > EPD GL Accounts.
The Manage Early Payment Discount GL Accounts window opens.
(Config U) In the Location box, enter the location that you want to delete its early payment discount GL accounts.
Note
If you had specified GL accounts at the <Company> level (all locations use the same GL accounts), select <Company> to remove the GL accounts for all locations. If you only have one location, <Company> is hidden.
Click Retrieve GL Accounts.
A GL Account list appears.
In the GL Account column, select the GL account to remove.
Click Remove GL Account.
Click Yes to confirm the removal.
The GL account is removed.
Click Save.
As mentioned above, there are four processes involved in setting up early payment discounts - if you've been following along up to this point, you've completed three of them:
defining the EPD types
defining the EPD rates
defining the EPD GL Accounts
You still have one step to go:
flagging products as EPD-eligible (and optionally setting an EPD override rate)
You can offer, edit, and delete early payment discounts and amounts on invoices, even if you have discounts set up as defaults or an item on the invoice is not eligible for an early payment discount.
If you are accepting an immediate payment, you can also edit (or delete) the early payment discount amount directly on the Immediate Payment tab before the payment is processed, even if you have EPD amounts specified elsewhere. For example, you may offer a portion of the EPD amount for partial payments rather than the full EPD amount.
What you'll find:
Even if you do not have early payment discounts set up as defaults, you can still offer them directly on invoices.
To offer an early payment discount on an invoice
Navigate to Accounts Receivable > Invoices. Or click the Invoices toolbar button.
The Invoices window opens and all invoices created today are listed.
Click Add.
- or -
In the Invoice list, select the invoice that you want to have an EPD and then click Edit.
The Add Invoice or Edit Invoice window opens.
Click the Customer and Shipping tab.
The Customer and Shipping tab is selected by default.
(configurable) Select the Offer EPD on this invoice check box.
The Offer EPD on this invoice check box is selected by default. However, this check box is not available if you do not have EPD’s set up.
If you are offering an early payment discount on the an invoice, you can also specify the discount amount directly on the invoice.
Related Topic: Returning Products and Blends with EPD on Invoices
To edit an early payment discount on an invoice
Navigate to Accounts Receivable > Invoices. Or click the Invoices toolbar button.
The Invoices window opens and all invoices created today are listed.
Click Add.
The Add Invoice window opens.
Click the Totals tab.
In the Early Payment Discount list, select the early payment discount to edit and then click Edit Row.
The Edit Early Payment Discount window opens.
In the Discount Applies if paid by box, change the date that the invoice must be paid in order for the early payment discount to apply.
Select the Calculate EPD dollar amount based on discount percentage check box to edit the early payment discount based on its percentage. In the Discount Percent box, change the discount percentage. If you want the early payment discount percentage to apply to all eligible products on the invoice, select the Use this percentage for all eligible products check box. Or, if you want the early payment discount percentage to only apply to products that do not have other discount rates applied to them, select the Use this percentage for products without override rates check box.
- or -
Select the Set EPD dollar amount explicitly check box to edit the early payment discount based on its dollar value. In the Discount Amount box, change the discount amount. If you want the early payment discount amount to remain the same regardless of changes made to the invoice, select the Do not recalculate this amount when the invoice changes check box.
Click Update.
The Edit Early Payment Discount window closes and the updated item appears in the Early Payment Discounts list.
In the GL Account box, change the GL account that the early payment discounts are applied to.
The default GL Account specified on the Early Payment Discount GL Accounts window is selected by default.
You can remove early payment discounts directly on invoices, even if you have discounts set up to apply to new invoices by default.
To remove an early payment discount from an invoice
Navigate to Accounts Receivable > Invoices. Or click the Invoices toolbar button.
The Invoices window opens and all invoices created today are listed.
Click Add.
- or -
In the Invoice list, select the invoice that you no longer want to have an EPD and then click Edit.
The Add Invoice or Edit Invoice window opens.
Click the Customer and Shipping tab.
The Customer and Shipping tab is selected by default.
(Config I, U, L,C) Clear the Offer EPD on this invoice check box.
The Offer EPD on this invoice check box is selected by default. However, this check box is not available if you do not have EPD’s set up. This setting overrides the same settings in your configuration settings.