For each AR company you set up, you can define how discounts are handled on invoices and/or receipts.

If you select to allow discounts on invoices and receipts, the system calculates discounts at the time of invoice entry. Discounts posted for an invoice are considered 'offered' discounts; they are not actually taken until the payment is posted. Although discounts are usually offered for payment received within a specified amount of time, they can be taken regardless of whether payment is received in the specified time frame.

If you select to allow discounts on receipts, no discount is calculated during invoice entry. You can only post discounts when processing payments.

The Allow TaxDisc on Invoices & Receipts option determines whether you can take discounts when posting invoices and/or cash receipts. However, you can only use this feature if you allow discounts on invoices and/or receipts. If you allow discounts on invoices and receipts, tax discounts are calculated during invoice entry and then applied when posting cash receipts. Tax discounts are based on the line's tax rate times the discount offered. For example, a $100 invoice with $5 tax (5%) and a discount of $3 (3%) would also have a Tax Disc of $.15 (5% x $3).

When initializing cash receipts (AR Receipt Initialize), if you check the Apply Discounts option, the system automatically takes the tax discount along with the payment discount, as long as the discount date is within the period specified by the customer's payment terms. If you are entering payments manually, you can apply the tax discount by accessing the invoice line, entering the payment amount in the Amount Applied column, then pressing Ctrl + E to apply the tax discount.