Happy Christmas 2007
Happy Christmas 2007!
Monthly Archive for December, 2007
Friday 07 Dec 2007
Advantages & Disadvantages of Settlement Discounts
Advantages
Encourages customers to pay early, thus helping cashflow.
Can be used as a marketing device.
Disadvantages
Some customers take the discount without actually paying within the timescale required.
0 comments Happy Accountant | Accountancy, Accounting, Bookkeeping, Friday Blog, Working for yourself
Wednesday 05 Dec 2007
VAT on settlement discounts
For the purposes of VAT, settlement discounts are treated as a finance charge. Therefore, VAT is calculated on the net amount (after the settlement discount - regardless of whether the discount is actually taken).
0 comments Happy Accountant | Accountancy, Accounting, Bookkeeping, VAT
Tuesday 04 Dec 2007
Accounting for a Settlement Discount
When offering a settlement discount, the accounting entries are:
Credit Sales (with the full amount)
Debit Discounts allowed (P&L account) (with the discount amount)
0 comments Happy Accountant | Accountancy, Accounting, Bookkeeping
Monday 03 Dec 2007
Settlement Discounts
It is quite common to offer a settlement discount to customers who pay within a certain timescale. The main reason for offering such a discount is to aid cash flow. However, do not miss the sales/marketing advantage that this also offers: Make sure that all your customers are aware that you are offering a settlement [...]
0 comments Happy Accountant | Limited Company, Small Business, Working for yourself
