Default AP Discount Method

ObjAcct allows you to use one of two different methods for recording early payment discounts offered by your vendors.  When you take a discount in Pay Bills, the method used to update the General Ledger depends on the method chosen in Default AP Discount Method. 

If the "Reduce Original" method is elected, the discount is prorated over all the accounts and classes used in the document detail section of Enter Bills.  For example, if an invoice for office supplies of $100 was recorded with terms of 2%/10 Days, Net 30 Days, then if the invoice was paid within 10 days the Supplies account would show a balance of $98, the $100 invoice less the $2 discount.

If the "Separate Account" method was chosen, then you must enter a General Ledger account to be used to accumulate discounts in AP Discount Account. If you have set Use Classes to "Required" then you will also be required to enter a class in AP Discount Class.  Following the same example, after paying the invoice you would have a balance of $100 in your Supplies account and a balance of $2 in your Discounts account.