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Using TurboCASH

 







DISCOUNTS
EARLY SETTLEMENT DISCOUNT RECEIVED
  
This discount is received from your creditors or suppliers at the time of the settlement of their account. Your creditors or suppliers may agree with you that you may receive a certain percentage of discount e.g. 2 % 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. This discount needs to be entered as an income (other income accounting group) in a Discount Received account and will increase the net profit and will have no effect on the gross profit.

This discount will be received when the payment is actually made to the creditor or supplier before the agreed period, and will be recorded in the payments journal.

To Enter a Payment with Discount Received from a Creditor:
Click on the speed button or icon. You may also press the key on your keyboard. Alternatively you may press the and and keys on your keyboard. The Batch Type screen will be displayed.
Select the Payments Journal for the specific Bank Account, in which you wish to enter the payment to the creditor from the list displaying the available Batch Types and click on the button. The Batch Entry screen for the selected Payments Journal will be displayed.
Capture the Cheque or payment from the cheque counterfoil or requisition as follows:
  1. 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.

     

  2. 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) 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).
Since the Payments Journal is set to allow debit amount entry only, you need to enter a negative "-" minus sign) in before you type in the amount in the debit column. As soon as you press the key on you keyboard, TurboCASH will automatically transfer the amount to the to credit column.

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:

Minimise button - click to minimise this screen. Restore button - click to display this screen to full size and click again to restore it to its original size. Title bar - double-click to display the screen in full size or to return to the normal size. Title bar. The name of the selected batch. Title bar. The Alias for the selected batch. Close button - Click to close or exit this screen. Click to delete a selected transaction. Click to insert a row or line above a selected transaction. Click to balance the batch, if the batch is not already in balance. Click to post or update the transactions to the ledger, if the batch is in balance. Click to enter transactions Inclusive or Exclusive of VAT. Click to list the entries or transactions entered into the batch. Click to access more processing options for the batch. Click to set the Options for this batch. Enter the reference number for the transaction. Use the same reference number for all 3 entries. Enter or select the date of the transaction. Use the same date for all 3 entries. Enter a description for the transaction. Select the Creditor Account. Leave blank for the rest of the other 2 transactions. Enter debit amounts for Creditor accounts in this column. Leave blank for the first 2 entries. Scroll bar - scroll to view more transactions entered in the batch. Select the Discount Received Income Account. Select the Input Tax code or VAT account for Discount Received. Must be blank. Enter amount prefixed with a minus sign (-)to create the credit transaction for the Discount Received account.

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 transaction, which you are paying or settling for both the amount paid and the amount of the discount received or press the key on your keyboard to link the payment and to close this screen.

Title bar. Close button - Click to close or exit this screen. An arrow pointer will indicate the selected transaction. The date of the credit transaction entered in the Purchase Journal or the date of a Purchase Document. The Reference number transaction entered in the Purchase Journal or the document number of an a Purchase Document. The cheque reference number in the Payments batch. The amount of the transaction. The outstanding amount will be a less than the transaction amount, if a previous payment is linked to a transaction. The amount of the payment in the Payments batch. Vertical scroll bar - move up or down to view more transactions, if necessary.

The Open Item Selection screen will also be displayed when the amount for the Discount Received is entered for the Open Item Creditor Account.

Title bar. Close button - Click to close or exit this screen. An arrow pointer will indicate the selected transaction. The date of the credit transaction entered in the Purchase Journal or the date of a Purchase Document. The Reference number transaction entered in the Purchase Journal or the document number of an a Purchase Document. The cheque reference number in the Payments batch. The amount of the transaction. The outstanding amount will be a less than the transaction amount, if a previous payment is linked to a transaction. The amount of the payment in the Payments batch. Vertical scroll bar - move up or down to view more transactions, if necessary.
After entering all the payment transactions, you need to click on the speed button or icon press the key on your keyboard. TurboCASH will create the balancing entry to the bank and the discount received account and VAT account.

Minimise button - click to minimise this screen. Restore button - click to display this screen to full size and click again to restore it to its original size. Title bar - double-click to display the screen in full size or to return to the normal size. Title bar. The name of the selected batch. Title bar. The Alias for the selected batch. Close button - Click to close or exit this screen. Click to delete a selected transaction. Click to insert a row or line above a selected transaction. Click to balance the batch, if the batch is not already in balance. Click to post or update the transactions to the ledger, if the batch is in balance. Click to enter transactions Inclusive or Exclusive of VAT. Click to list the entries or transactions entered into the batch. Click to access more processing options for the batch. Click to set the Options for this batch. Enter the reference number for the transaction. Use the same reference number for all 3 entries. Enter or select the date of the transaction. Use the same date for all 3 entries. Enter a description for the transaction. Select the Creditor Account. Leave blank for the rest of the other 2 transactions. Enter debit amounts for Creditor accounts in this column. Leave blank for the first 2 entries. Scroll bar - scroll to view more transactions entered in the batch. Select the Discount Received Income Account. Select the Input Tax code or VAT account for Discount Received. Must be blank. Enter amount prefixed with a minus sign (-)to create the credit transaction for the Discount Received account. TurboCASH will create balancing entries to the Bank and the VAT account when the batch is balanced.
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 overtype this description as it is not very meaningful to an outside auditor or accountant. If you overtype these it will definitely make it easier to trace and reconcile transactions.
  • Overtype the description with "Payments - Cheque 107 " in the description column.

  • Overtype the description with "Input VAT - Discount Received" in the description column.

  • Do not overtype the ******** as it will indicate that these are contra transactions.
Click on the speed button or icon or press the key on your keyboard to change the alias. This will help you if you wish to identify a specific batch, if you wish to generate a batch type report or if you wish to export posted batches to a file.
Click on the speed button or icon or press the 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.
Click on the speed button or icon or press the key on your keyboard to post the batch. TurboCASH will post the entries to credit the total payments to the current bank account and debit the selected creditor accounts. The accounts will be displayed as follows:






A credit balance for the amount of discount received is created on the Creditor's account, since the creditor was only paid the net amount (after discount is received). The first transaction for the payment of the actual moneys paid is entered in the payments journal, created a debit transaction in the creditors account and a credit transaction to the bank account.

The discount received, transaction cleared the creditor's account and the created an income transaction in the Discount Received account. The VAT is credited to the Input VAT account, since the VAT was already debited to the Input VAT account when the purchase transaction was posted to the ledger.

It is recommended that if VAT is applicable, and the Creditor is a registered VAT vendor, that only the first transaction, i.e. the actual amount paid to the Creditor is captured in the Payments Journal. If the Creditor issues a credit note (only for the Discount received and the VAT on the Discount Received), this credit note may be captured in the Purchase Journal as a Return or in the Creditor Allowances or Purchase Returns Journal. This will ensure that the Input Tax is adjusted accordingly.