This discount is recorded when a debtor (customer) settles the full invoice within the specified time. The purpose of this discount is to encourage debtors to pay or settle their accounts on or before an agreed date.

You may agree with your customers to allow a certain percentage of discount allowed, e.g. 2½ %, if they settle the full amount on an invoice within 30 days.

- This discount is allowed to your debtors (customers) at the time of the settlement of their account. It is recorded in the Receipts Journal.

- This discount needs to be entered as an expense in a Discount Allowed account and will reduce the net profit and will have no effect on the gross profit.

To Enter a Receipt with Discount Allowed to a Debtor:

1. Click on the Batch Entry icon, or click on the Input→Batch Entry menu option.
   - Keyboard Access: Press the F2 key on your keyboard. Alternatively, press the Alt+I+B keys on your keyboard.
   The Batch Type Selection screen will be displayed.
2. Select the Receipts Journal.
   - If you have more than one bank account, select the correct Receipts Journal for the bank account into which the moneys is deposited.
   
   
3. Click on the Open button. The Batch Entry Transaction screen for the Receipts Journal is displayed:
   
   - If you have not yet set up the Receipts Journal, or if your requirements should change, click on the F10: Setup icon, or press the F10 key on your keyboard.
   
   - The contra account of the Bank Account to which the Receipts Journal is linked, will be displayed on the Batch Type Selection screen. You cannot change the contra account in the batch setup options for the Receipts Journal.
   
   - Note that for Receipts (Deposits), the Amount Entry field should be set to credit.
   
   
4. Capture the Receipt from the Deposit slips or Receipts as follows:
   • The amount Received and Deposited -You need to record the deposit number, date of the transaction, details of the transaction, select the debtor account and select the No Tax code, and enter the amount in the credit column. Since the Debtor, only paid the net amount (after any discounts were allowed), the debtor account or the specific invoice they are settling, will still reflect an outstanding amount. To correct this, you need to record the discount allowed.
   • The amount of Discount Allowed - To enter the discount allowed, use the same reference numbers, select the Debtor’s account, select the No Tax code, and enter the amount (Inclusive of VAT/GST/Sales Tax) in the credit column. To create the contra transaction, use the same reference numbers, select the Discount Allowed expense account, and select the Output Tax code and enter the amount (excluding VAT/GST/Sales Tax).
     - Since the Receipts Journal is set to allow a credit amount entry only, you need to enter a negative (”-” minus sign) before you type the amount in the credit column. As soon as you press the Enter key on you keyboard, TurboCASH will automatically transfer the amount to the to debit column.
5. After entering the transactions for the amount received from the debtor, as well as the discount allowed in the Receipts Journal, it will be displayed as follows:
   
   - If the debtor account was set to be an Open Item Debtor account on the Edit→Accounts→Debtor (Accounting Information tab), the Open Item Selection screen will be displayed for each transaction you allocate to the Debtor account.
   
   
   All you need to do, is to select the specific invoice the debtor is paying or settling for both the amount received and the amount of the discount allowed and press the Enter key on your keyboard, to link the transactions and to close this screen.
   The Open Item Selection screen will also be displayed when the amount for the Discount Allowed is entered for the Open Item Debtor Account.
   
   
6. Click on the F5: Balance icon, or press the F5 key on your keyboard, to list the batch. Balancing transactions will be generated to the Bank Account and the Output VAT/GST/Sales Tax Account.
   
   
7. TurboCASH will generate balancing entries to the Bank Account (contra account) and to the Output VAT/GST/Sales Tax Account, if a Tax Code was selected for a transaction.
   - If the Consolidate Balancing option is selected in the Setup Options for this batch, the description for the balancing entries or transactions, will be displayed as “BALANCING ENTRY Receipts Jnl”.
   
   - It is a good idea to over type this description, as it is not very meaningful to an outside auditor or accountant. If you over type these, it will definitely make it easier to trace and reconcile transactions.
   
   
   • Over type the description with “Deposit Slip D5001” in the description column.
   • Over type the description with “Output VAT (GST/Sales Tax) on Discount Allowed” in the description column.
   • Do not over type the eight asterisks in the reference column, as this indicates that these are contra transactions.
     - If you have selected a Tax code, in the Cash Book (Receipts Journal and Payments Journal), the amount EXCLUSIVE of VAT/GST/Sales Tax (NOT the INCLUSIVE of VAT/GST/Sales Tax) is reflected in the amount column, when the cursor is not on the amount field of a transaction.
8. Click on the F9: Process icon, or press the F9 key on your keyboard, to change the alias (batch name).
   - This will help you if you wish to identify a specific batch to generate a batch type report, or if you wish to export posted batches to a file.
   
   
9. Click on the F8: List icon, or press the F8 key on your keyboard, to list the batch.
   - It is a good idea to list the batch, and check the entries on the batch thoroughly. If there are any errors, you may edit the batch, before posting the batch.
   
   
10. Click on the F6: Post icon, or press the F6 key on your keyboard, to post (update) the batch to the ledger.

- Colour Coding

• Blue font colour - This indicates that the transaction is already reconciled in the Input→Reconcile Bank menu option.
• Yellow background row - This indicates that the credit transaction is linked to a debit transaction on the Open Item Selection screen.

- You may enter transactions in a batch daily, and only post at the end of the month. Exiting or closing the batch, or even TurboCASH, will not cause these transactions to be lost. You may also choose to post after every entry.

- TurboCASH allows you to reconcile your Bank Accounts, before posting your Payments and Receipts Journals. This will allow you to easily correct any errors found, when doing the bank reconciliation. Please note that you cannot reconcile unposted items created on the “client machines” if you are working on a network version of TurboCASH.

After posting the transactions, the T-Account View of the transactions should reflect as follows:

1. Debtors’ Ledger:
   
   The total amount of the Receipt (money deposited) + Discount Allowed is credited to the Debtor’s Account.
   
2. General Ledger:
   
   
   
   The total amount of the receipt into the Bank Account + Discount Allowed + Output VAT (GST/Sales Tax) on the Discount is debited to the General Ledger Accounts.

- Debits - Bank + Discount Allowed + Output VAT (GST/Sales Tax) (on Discount Allowed) Accounts = Credits - Debtor’s Ledger