Receivables lets you give discounts to your customers when they pay for their debit items before a certain date. Discounts are determined by the payment terms you assign to your customers. You can also choose whether to allow discounts for partial payments and specify how you want Receivables to calculate the discount on your invoices.

Earned and Unearned Discounts
Receivables lets you determine whether your customers can take earned and unearned discounts. An earned discount is a discount you give to a customer who pays on or before the discount date or within the discount grace period. For example, a customer may earn a 2% discount off the original invoice if payment is received within 10 days. The earned discount period is determined by the invoice date, apply date of the receipt, and any discount grace days.

Receivables also lets you choose whether to allow unearned discounts. Unearned discounts are discounts that you allow after the earned discount period has passed. If the discount is unearned, the default earned discount is zero and the maximum value of the unearned discount is dictated by the payment terms. If the discount is earned, the default discount is the amount of the earned discount. Receivables lets you override the discount amount during payment entry and warns you if you are taking an unearned discount. You specify whether your customers can take unearned discounts in the System Options window.

Discounts on Partial Payments
Receivables lets you choose whether to allow discounts when your customer remits partial payment for an open debit item. If you allow discounts on partial payments, Receivables prorates the amount of the discount based on the applied amount. You can control whether your customers can receive discounts for partial payments by setting the system option Discount on Partial Payment to Yes or
No.

Tiered Discounts
When you define your payment terms, you can assign multiple discounts to each payment schedule. You might want to assign different discount percents based on different discount dates. For example, you might give your customers a 15% discount if they pay within 10 days after the invoice date, but only a 5% discount if they pay within 15 days.

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