What determines how customer discounts can be calculated?

The calculation of customer discounts in the context of Sage Intacct is primarily determined by Accounts Receivable (AR) Terms. AR Terms are established agreements that specify the conditions of payment and discounts applicable to customers. These terms outline how and when various discounts can be applied to invoices, depending on the payment timing or volume, allowing for flexible management of customer payments and incentivizing early or prompt payment.

Utilizing AR Terms ensures consistency in discount application, making it easier for businesses to manage their revenue and cash flow. For instance, an AR Term might specify a 2% discount if payment is made within 10 days of invoicing, which directly affects how discounts are applied when invoices are processed.

The other options, while related to customer transactions, do not specifically govern discount calculations in the same manner that AR Terms do. Payment Methods are more about how the customer pays rather than the terms associated with discounts. Contract Terms generally lay out the broader agreements between the customer and the business, not specifically discount calculations. Invoice Types categorize the invoices but do not dictate how discounts are calculated based on payment terms. Thus, AR Terms is the critical factor for determining customer discount calculations.