In the Accounts receivable parameters we have a parameter called Discount. There are 6 options for this which has an implication on how the discount is calculated on the sales line.
Here is a quick rundown :
This option is clear if there is a line discount then only use this discount. For example if you have setup both line and multiline discounts only the line discount will be calculated.
If this parameter is set then only the multiline discount is used. For example if you have setup both line and multiline discounts only the multiline discount will be calculated.
This option is design to given the customer either of the line or the multiline discount whichever is the largest. For example in this case line discount is 3 and multiline is 2 so 3 is used.
This option is designed to give the least discount if both line and multi-line discounts are setup. For example in this case line discount is 3 and multiline is 2. So 2 is used.
Use this option if you are feeling generous as it will add both the line and the multiline discount. In this example line is 3 and multiline is 2 so the sum is 5 and hence the customer will get a 5% discount.
This is probably the least obvious calculation. If you follow the pattern from the previous 5 options you would assume this is 3 * 2 which = 6%. In fact this is a calculation which is
discPct = (((1- (100 – linePercent) / 100 * (100 – multiLnPercent) / 100)) * 100);
If we follow this calculation through the discount will be 4.94%.
So 4.94% * 100 = 4.94. 100 – 4.94=95.06 which is why you see $95.06 as the net amount on the line.
This setting is on the Accounts receivable parameters this is specific to the company the user is in. If you are implementing the Retail module then you have additional discount setup that could be done over there but this setting will affect anything going into the sales order even if it is originated from retail.
As a by-the way there is a similar parameter in the Procurement and Sourcing parameters I’ll cover that I a separate post.