Accounts Payable

Early Payment Discounts

When Discounts Apply

  • Discounts are applied if the payment is approved within the number days allowed by the payment terms selected on the Purchase Order
    • (Approval Date) – (Invoice Date) <= Discounts Days Allowed
  • The Disbursement Date, or payment date, is the maximum allowed to receive a discount, or the maximum allowed by the payment
  • If the Purchase Order and the Invoice have conflicting payment terms, UCD will take the more advantageous terms when processing payment
  • Discount terms are not available on sub-award invoices

What is Discounted?

  • Early payment discounts apply to the entire order, less shipping or freight charges
  • Sales tax is calculated after discounts are applied
  • Example: $100 invoice line, $10 shipping, 7.5% tax rate, 2% discount
    • $100 x .02 = $2 discount = $98 line amount after discount
    • $98 x .075 = $7.35 sales tax
    • $100 line + $7.35 tax + $10 shipping - $2 discount = $115.35 net

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Accounts Payable

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