Payment discount using the VAT calculation basis

You must set Betalingskorting via grondslag BTW if you want Profit to first subtract the payment discount from the calculation basis for VAT calculation purposes and then add it back to the invoice total. When the entry is journalised Profit generates and additional journal entry line in order to record the calculation basis for the VAT levy for the VAT declaration. With this procedure, Profit does not calculate any VAT on any payment discount to be deducted. In fact the debtor in that case pays less VAT and the invoice total is lower (reduced by the VAT on the payment discount).

Note:

This procedure is primarily common practice in Belgium, however, other Profit customers can also use this procedure. This procedure applies to all Profit components that generate sales invoices, but not for manual entry in Profit Financieel.

Example:

Profit first subtracts the payment discount from the calculation basis for VAT calculation purposes and then adds it back to the invoice total.

Activate functionality

You activate the Payment discount functionality.

Ideally you should activate the new functionality at the end of the working day, or over the weekend. This is because during the activation process, a conversion will always occur, and during this conversion your employees cannot work in Profit. It is recommended that you first test a new activation in a test environment, before you implement it in the live environment.

To activate the functionality:

1. Go to: General / Environment / Management / Properties.
2. Go to the tab: Activation.
3. Select the check box of the functionality that you want to activate.

   Profit warns you that after activating the functionality the environment needs to be converted.

4. Click on: Yes to activate the function.
5. Click on: OK.

   Profit warns you that no other users can be logged on.

6. Click on Yes in the message.

Set the payment discount using the VAT calculation basis

The payment discount via the VAT calculation basis can be selected in the Logistics settings.

To record an account:

1. Go to: Order Management / Management / Settings.
2. Go to the tab: General.
3. Select the Betalingskorting via grondslag BTW check box.
4. Click on: OK.

Configure the integration type

You configure the payment discount per integration type. For each integration type, you can set a deviating number of days.

An additional ledger account is required to correctly journalise the VAT calculation basis required for the VAT declaration. You can set this ledger account for the integration type.

To configure the integration type:

1. Go to: General / Configuration / Integration settings / Integration type.
2. Open the properties of integration type Order management sales invoices.
3. Go to the tab: General.
4. Select the Use payment discount check box.
5. Enter a value in Days payment discount.

   You can print this number of days on the invoice layout.

6. Select a ledger account in Payment discount account and in Payment discount contra account.

   You can only complete this field if you have selected the Betalingskorting via grondslag BTW check box in the logistics settings. In Belgium this payment discount calculation basis ledger account is known as the taxable amount method (‘Maatstaf van heffing’). If you are unable to select the ledger account for this, you must still add this ledger account.

7. Click on: OK.

Record the payment discount rate

You record the percentage of the payment discount per sales contact.

To record the payment discount rate:

1. Go to: 
   • Financial / Debtor / Debtor.
   • Order Management / Sales / Sales contact.
2. Open the properties of the debtor.
3. Go to the tab: Price/discount.
4. Enter a value in Payment discount (%).

   Profit copies this percentage when adding orders for the sales contact. You can still change the payment discount rate in the order.

5. Click on: OK.

Invoice the payment discount using the VAT calculation basis

When a sales order, packing slip and invoice is added, you see the calculation of the payment discount in the footer calculation.

Example:

The invoice appears as follows:

€ 20 can be deducted from € 1,205.80 when payment is made within xx days. In that case you pay € 1,185.80.

To have the relevant fields displayed you can modify the entry layout and the report layout of the sales order, the packing slip and the invoice.

To adjust an entry layout and report layout:

1. Add the fields for the payment discount to the Footer tab (within this on the Totals tab) in the properties of the entry layout for the sales order, packing slip and invoice.

   The question here is which fields do you want to see and whether you use the automatic calculation of the payment discount and the number of days set for this. You can add the following fields:

   • Payment discount
   • Payment discount (%)
   • Days payment discount

   It is also possible to select other fields.

2. Add the fields for the payment discount to the report layout for the sales order, packing slip and invoice.
   1. Go to: Order Management / Output / Management / Report.
   2. Open the properties of the report.
   3. Click on: Modify.
   4. The Days payment discount field is located in the Invoicing data collection. The other fields are listed below the Amounts data collection.

Journalise the payment discount using the VAT calculation basis

When the entry is journalised Profit createes an additional journal entry line in order to record the calculation basis for the VAT levy for the subsequent VAT declaration. Profit posts this as a debit with the VAT code (1 line per calculation basis) and then posts it as a credit without the VAT code (sum of the lines) when posting the payment.

If you journalise an invoice, the following journal entry is created:

If the debtor pays with deduction of the payment discount and you post the payment to the bankbook, the following journal entry is created: