Which setting governs the calculation of discounts on customer invoices?

The governing setting for the calculation of discounts on customer invoices is the AR Terms. This option is crucial because AR Terms outline the specific conditions under which payments are made, including any discount percentages offered and the timeframes for taking advantage of these discounts. Essentially, these terms define the payment agreement between the business and its customers, clarifying how and when discounts apply on invoices.

While customer profiles may contain important information about specific customers, such as payment history and contact details, they do not dictate how discounts are applied on invoices. Similarly, promotion codes are typically used for marketing campaigns and may offer discounts but are not the standard method for calculating discounts on invoices. Payment plans pertain more to the structure of installment payments rather than the calculation of discounts.

Thus, AR Terms is the foundational setting that effectively establishes discount protocols, contributing to accurate and consistent discount calculation within the invoicing process.