This discount is received from your creditors (suppliers) at the time of the settlement of their account. The purpose of this discount is granted by creditors (suppliers) to encourage to pay or settle accounts on or before an agreed date.

Your creditors (suppliers) may agree with you that you may receive a certain percentage of discount, e.g. 2½ %, if you settle the full amount on a purchase within 30 days.

- This discount is recorded when you settle the full supplier invoice or your purchase document within the specified time. It is recorded in the Payments Journal.

- This discount needs to be entered as an income in a Discount Received account, and will increase the net profit and will have no effect on the gross profit.

To Enter a Payment with Discount Received from a Creditor:

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 Payments Journal.
   - If you have more than one bank account, select the correct Payments Journal for the bank account from which the moneys is paid.
   
   
3. Click on the Open button. The Batch Entry Transaction screen for the Payments Journal is displayed:
   
   - If you have not yet set up the Payments 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 Payments 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 Payments Journal.
   
   - Note that for Payments (Cheques), the Amount Entry field should be set to debit.
   
   
4. Capture the Cheque or payment from the cheque counterfoil or requisition as follows:
   • The amount paid - You need to record the cheque number, date of the transaction, details of the transaction, select the creditor account and select the No Tax code, and enter the amount in the debit column. Since you pay only the net amount (after any discounts were received) to the creditor, the creditor account or a specific invoice, the creditor account will still reflect an outstanding amount. To correct this, you need to record the discount received.
   • The amount of Discount Received - To enter the discount received, use the same reference numbers, select the Creditor’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 Received income account, and select the Input Tax code and enter the amount (excluding VAT/GST/Sales Tax).
     - Since the Payments Journal is set to allow a debit amount entry only, you need to enter a negative (”-” minus sign) before you type the amount in the debit column. As soon as you press the Enter key on you keyboard, TurboCASH will automatically transfer the amount to the to credit column.
5. After entering the transactions for the amount paid to the creditor, as well as the discount received in the Payments Journal, it will be displayed as follows:
   
   - If the creditor account was set to be an Open Item Creditor account on the Edit→Accounts→Creditor (Accounting Information tab), the Open Item Selection screen will be displayed for each transaction you allocate to the Creditor account.
   
   All you need to do, is to select the specific purchase document or transaction you are paying or settling for both the amount paid and the amount of the discount received or press the Enter key on your keyboard, to link the payment and to close this screen.
   
   
6. Click on the F5: Balance icon, or press the F5 key on your keyboard, to balance the batch. Balancing transactions will be generated to the Bank Account and the Input VAT Account.
   
   
7. TurboCASH will generate balancing entries to the Bank Account (contra account) and to the Input 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 Payments 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 “Payments - Cheque 107” in the description column.
   • Over type the description with “Input VAT (GST/Sales Tax) - Discount Received” 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. Creditor’s Ledger:
   
   The total amount of the Payment (money paid to creditor) + Discount Received is debited to the Creditor’s Account.
   
2. General Ledger:
   
   
   
   The total amount of the Payment out of the Bank Account + Discount Received + Input VAT (GST/Sales Tax) (on the Discount Received) is credited to the General Ledger Accounts.

- Debits - Creditor’s Ledger = Credits - Bank + Discount Received + Input VAT (GST/Sales Tax) (on Discount Received) Accounts