Sage 200 Settlement Discount Reversal
If you’ve paid a supplier within the time frame to qualify for settlement discount (early payment discount) but you made a mistake when posting it, we have the solution for you.
There are 2 ways of recording a settlement discount, each method has to be reversed in a different way. In this tip of the week, we’ll show you both ways of reversing a settlement discount in Sage 200.
(Click the images to expand for easier viewing.)
Method 1: Using the Settlement Discount Field on the Payment Screen
Use this reversal method if you recorded the settlement discount using the settlement discount field.
Navigate to: Purchase Ledger > Enter Transactions
Click ‘Payment’.
Enter the amount you’re paying in ‘Cheque value’ and enter the ‘Settlement discount’.
Click ‘Save’ and then ‘Close’.
To allocate to the invoice, navigate to: Purchase Ledger > Enter Transactions > Allocation.
Select the supplier from the ‘Code’ dropdown.
Under ‘Credits’ and ‘Debits’, enter the invoice value (cheque value + settlement discount from the previous step) into the ‘Allocate’ column.
Click ‘Save’ and then ‘Close’.
How to Reverse
To reverse the settlement discount, we need to make sure it’s unallocated first.
From the suppliers list, click ‘Transaction Enquiry’.
Untick ‘Show outstanding only’.
Highlight the one you want to reverse and click ‘Correct’.
On the ‘Correct Single Supplier Transaction’ screen, and then ‘Allocations’.
On the ‘Amend Supplier Allocations’ screen, highlight the transaction and click ‘Edit’.
Under ‘Credits’ and ‘Debits’, change the ‘Allocate’ column to 0 on both lines.
Click ‘Save’ and then ‘Close’.
You should find yourself back to the ‘Correct Single Supplier Transaction’ screen. Now, click ‘Reverse’.
Now click ‘Save’.
The reversal is complete!
Method 2: Using the Difference Field on the Supplier Allocations Screen
Use this reversal method if you recorded the settlement discount this way.
Navigate to: Purchase Ledger > Enter Transactions.
Select the supplier from the list and click ‘Payment’ along the top menu.
Enter the ‘Reference’ and ‘Cheque value’ – which will be the discounted price. In this example, it’s 117.
Click ‘Save and Allocate’.
In the ‘Debits’ section, under the ‘Allocate’ column, allocate the full amount of the invoice value. In this example it’s 120.
You should see the settlement discount amount in the ‘Difference’ field in the bottom right corner.
Click ‘Save’. It’ll ask you if you wish to write the discrepancy off as a discount. Click ‘Yes’ and then ‘Close’.
How to Reverse
At the top of the suppliers list, press ‘Transaction Enquiry’ and untick ‘Show outstanding only’.
Here, you should see 3 lines – invoice, payment and settlement discount.
If you’ve made a mistake, select the ‘Sett Disc’ line and click ‘Correct’.
On the ‘Correct Single Supplier Transaction’ screen, click ‘Allocations’.
On the ‘Amend Supplier Allocations’ screen click ‘Edit’.
For all 3 lines under the ‘Credits’ and ‘Debits’ sections, change the ‘Allocate’ column to 0.
Click ‘Save’. Close the screens until you get back to the ‘Supplier Transaction Enquiry’ screen.
Highlight the line for the payment (in this example -177) and click ‘Correct’.
Next, on the ‘Correct Single Supplier Transaction’ screen, click ‘Reverse’.
Next, click ‘Save’.
The transaction should be removed from the ‘Correct Single Supplier Transaction’ screen. Now click ‘Close’ until you get back to the suppliers list.
Note: The settlement discount can’t be reversed in the same way because the transaction hasn’t affected the Cashbook or VAT return. We need to raise a dummy invoice to reverse it.
At the top of the suppliers list, click ‘Invoice’.
Enter the ‘Reference’ and ‘Second ref’. Then enter the settlement discount amount you want to reverse in the ‘Goods value’ field. In this example, it’s 3.
Under the ‘Nominal & VAT Analysis’ tab, change the ‘VAT Analysis Code’ dropdown to ‘Non Vatable’ and change the ‘Nominal Analysis Code’ dropdown to the same as the settlement discount.
Finally, click ‘Save’.
Navigate to: Purchase Ledger > Enter Transactions > Allocation.
Select the supplier from the ‘Code’ dropdown.
Under ‘Credits’ and ‘Debits’ enter the settlement discount value against the ‘Sett Disc’ line. In this case, it’s 3 again.
Click ‘Save’ and then ‘Close’.
The settlement discount has now been reversed!
For more help with Sage 200, contact support if you’re an existing customer. Alternatively, complete the enquiry form to discuss our support services.
