How discounts are selected in Fusion Payables

There are two ways to take discounts with Payables:

Method 1: Enable the “Always Take Discount” Supplier option. Payables takes a discount regardless of when you pay the invoice.

Method 2: Select “Pay Date Basis” value as Discount at the supplier site, and also select “date basis” as “Pay date” on the Selection Criteria tab on the payment process request pages. Payables takes a discount and pays the invoice within the discount period.

Pay Through Date(definition) = Ending date of the pay cycle. The system compares this date to the scheduled pay date for the voucher payment schedule.

A payment date is the date on which a declared stock dividend is scheduled to be paid.

Logic of installment & discount selection:

IF Supplier site option “Always Take Discount” is enabled then

Payables takes a discount regardless of when you pay the invoice means discount is selected irrespective of the payment date & pay through date.

ELSE

IF Payment process request “date basis” = ‘Pay date’ then

IF supplier site “Pay Date Basis” value = Discount && discount date <= pay through date && discount date <= payment date && payment date < due date

then discount is selected.

ELSE IF supplier site “Pay Date Basis” value = Due

“NO discount” selected

& invoice due date should fall before pay through date & payment date both then only installment is selected.

ELSE IF Payment process request “date basis” = ‘Due date’ then

invoice due date should fall before pay through date & payment date both then installment selected, “NO discount” selected.

END IF;

If there are multiple discount dates, then the latest discount is selected where discount date >= payment date 

For Example: discount dates are 10, 15, 20 Jan and payment date is 17^th Jan then 15^th Jan discount would be selected.

Method 1: Enable the “Always Take Discount” Supplier option

Discount Options in Manage Invoice Page:

The following table describes the discount options in Manage Invoice options.

Option	On Supplier Setup?	Description
Exclude tax from calculation	Yes	Subtracts tax from the invoice when calculating the discountable amount for an installment. Caution: You can't set the discount allocation method option to Tax lines and single distribution.
Exclude freight from calculation	Yes	Subtracts freight from the invoice when calculating the discountable amount for an installment.
Discount allocation method	No	Determines how discounts are allocated across invoice distributions.
Always take discount	Yes	Takes the available discount for a supplier, regardless of when you pay the invoice.

Supplier site setup screen:

Method 2: Select “Pay Date Basis” value as Discount at the supplier site, and also select “date basis” as “Pay date” on the Selection Criteria tab on the payment process request pages. Payables takes a discount and pays the invoice within the discount period.

Pls Select “Pay Date Basis” value as Discount at the supplier site

The Pay Date Basis setting on the supplier site determines whether the installment is selected for payment and whether a discount is taken.

• Discount. Payables selects invoices for payment based on the scheduled payment discount date.

• Due. Payables selects invoices for payment based on the scheduled payment due date, regardless of any available discounts.

Pls select “date basis” as “Pay date” on the Selection Criteria tab on the payment process request

 

Examples from Oracle Documentation:

Pay Through Dates and Payment Dates in Payment Process Requests:

Payment process requests use the Pay Through Date and Payment Date values to determine whether to select an installment for payment and take a discount.
The following scenario illustrates the effect of these values in a payment process request, along with the impact of the Always Take Discount option.

 

Pay Through Dates and Payment Dates in Payment Process Requests

An invoice that's ready for payment has an installment with the following information:

·       Due date of August 30, 2015

·       First discount date of July 15, 2015, for 150 USD

·       Second discount date of July 30, 2015, for 100 USD 

The Date Basis on the payment process request is Pay Date, and the Pay Date Basis for the supplier site is set to Discount. 

This table provides examples of different Pay Through Date, Payment Date, and Always Take Discount combinations, and the resulting installment and discount information. 

Example	Pay Through Date	Payment Date	Always Take Discount Option	Installment Selected?	Discount Taken Amount
1	July 14, 2015	July 17, 2015	Enabled or disabled	No. The Pay Through Date is before the first discount date.	None. The installment isn't selected.
2	July 15, 2015	July 17, 2015	Enabled or disabled	Yes. The Pay Through Date is on or after the first discount date.	100 USD. The Payment Date is after the first discount date, but before the second discount date.
3	July 15, 2015	July 31, 2015	Disabled	Yes	None. The Payment Date is after the discount dates and the Always Take Discount option is disabled.
4	July 15, 2015	July 31, 2015	Enabled	Yes	150 USD. Although the Payment Date is after the discount dates, the first discount is taken because the Always Take Discount option is enabled.
5	July 15, 2015	August 31, 2015	Disabled	Yes	None. The Payment Date is after the due date and the Always Take Discount option is disabled. Note: Interest may be calculated depending on your settings.
6	July 15, 2015	August 31, 2015	Enabled	Yes	150 USD. Although the Payment Date is after the due date, the first discount is taken because the Always Take Discount option is enabled. Note: Interest may be calculated depending on your settings.

Note: Results are different if the Date Basis is Due Date, or the Date Basis is Pay Date and the supplier Pay Date Basis is Due. In this case, the payment process request selects the installment only when the Pay Through Date is on or after the due date.

 

Date Basis in Payment Process Requests: Examples

You can specify a date basis of either Pay date or Due date on the Selection Criteria tab on the payment process request pages. Date basis affects the installment selection and discount taken.
The following scenarios illustrate the effect of the date basis setting in a payment process request.
For both scenarios, the invoice has the following information:

·       Amount: 3,000 USD

·       Due date: March 31

·       First discount date: February 15

·       First discount amount : 150 USD

·       Second discount date: February 28

·       Second discount amount: 100 USD

The payment process request includes the following selection criteria:

·       Payment date: February 8

·       Pay through date: March 30

 

Pay Date

If you set the Date Basis field to Pay date, the Pay Date Basis setting on the supplier site also affects the installment selection and discount taken.

Note: Specify the Pay Date Basis in the Terms section of the Invoicing tab on the Supplier Site pages.

The following table shows the effect of the Pay Date Basis on the payment process request.

Pay Date Basis on Supplier Site	Installment Selected for Payment?	Discount Amount	Additional Information
Discount	Yes	150 USD	·       The installment is selected because the pay through date of March 30 is later than at least one of the discount dates. ·       The discount is 150 USD because the payment date of February 8 is before the first discount date of February 15. Note: If the payment date was after February 15, but before February 28, the second discount of 100 USD would be taken.
Due	No	Not applicable	The installment isn't selected because the due date of March 31 is later than the pay through date of March 30.

 

Due Date

If you set the Date Basis field to Due date, the installment isn't selected for payment because the due date of March 31 is later than the pay through date of March 30.

Example:

An installment for $1,000 USD is due for payment on January 10, 2016. The installment has two discounts: the first discount date is December 5, 2015 for $150 USD and the second discount date is December 20, 2015 for $50 USD. The Pay Date Basis on the supplier site is Discount. You submit a Payment Process Request with the following criteria;

- Payment Date = December 5, 2015

- Pay Through Date = December 25, 2015

- Date Basis = Pay Date

- Always Take Discount option is enabled

What will be the resulting status of the installment and discount?

If the supplier site Pay Date Basis is set to Discount, the installment is selected for payment but If the supplier site Pay Date Basis is set to Due, the installment is not selected for payment because the installment due date of 10 Jan 2016 is later than the Pay Through Date of 25 Dec 2015. The Pay Through Date determines the installment selection.