How to calculate the PP discount (“immediate payment”) in the NAV?

The behavior of this calculation is established in the table “Accounting configuration”within the "Administration" section of the area "Financial Management" of the NAV.

According to a question asked to the Revenue Agency (or at least as far as I know), the PP discount cannot change the "base" of the published invoice, but is made at the time of recording the "payment" of the invoice.

In short, the VAT we pay on buying and selling should not be affected by this discount.

Below is a description of the behavior of the NAV, based on the accounting configuration (I quote the help of the system itself):

The early payment discount can be calculated in two ways: at the time of invoicing (as is the most common case in Spain) or at the time of payment (as is the case in most European countries).

In this field you can choose which type of Early Payment discount best suits your needs. The options displayed in the field are as follows:

  • Total
  • Dto. PP VAT excluded
  • Adjust data. PP
  • Disk. PP in rows

Total:

This is the type of quick checkout discount used in the UK. When you select this option, the system uses the value displayed in the "Amount incl. VAT" box. to calculate the cash discount.

As in the case of Quick Checkout discount options: Discount. PP excluding VAT and discount adjustment. PP the discount is applied and recorded at the time of payment (provided the payment date has not exceeded that specified in the PP Discount Date field of the Customer Movements or Supplier Movements window).

With this option the system will subtract the entire prompt payment discount from the amount excluding VAT reported in the sales document. This does not change the amount of VAT declared to the tax authorities.

Dto. PP VAT excluded:

When you select this option, the system uses the value in the Amount field to calculate the cash discount.

As with the Quick Checkout discount options: Full Amount and Adjust Discount. PP the discount will be recorded at the time of payment (provided the payment date has not exceeded that specified in the PP Discount Date field of the Customer Movements or Supplier Movements window)

Adjust data. PP:

When you select this option, the system uses the value displayed in the Amount Including VAT field. to calculate the cash discount.

As in the case of the Prompt Payment discount options: Full Amount and Discount. PP excluding VAT, the discount is applied and accounted for at the time of payment (provided the payment date has not exceeded that specified in the PP Discount Date field of the Customer Movements or Supplier Movements window).

If this option is selected, the system will recalculate VAT amounts when payments that include a cash discount are specified. VAT is reduced in proportion to the total discount for timely payment. (For example, if the cash discount is €18.00 the program will subtract €2.00 from the VAT and €16 from the amount of the sales document).
Clicking on this field will activate the functionality in general. To use it for different combinations of VAT posting categories, you must activate the Adjustment for discount field. page

Disk. PP in rows:

This is the most used option in Spain. In this case the Prompt Payment discount is calculated on the amount, excluding VAT, of the sales document and is recorded and deducted from the invoice amount when the invoice is created and recorded.

By selecting this option you must choose the way in which the cash discount will be calculated in the Discount calculation field.

Therefore: Let's keep this in mind, even if the NAV help tells us that the most used form in Spain is Dto. PP in lines...this doesn't necessarily imply that it is The correct one.

If you want to read other articles similar to How to calculate the PP discount (“immediate payment”) in the NAV? you can visit the category Power Apps.

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