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Product Update 394: New Functionality to Include Charges and Discounts Imposed Internally or Externally in Sales Entries

Introduction

Imposing charges or offering discounts on top of the sales prices of item is becoming a common practice. These extra charges or discounts may incur internally based on the company’s policies such as the price agreements between customers and vendors, as well as externally based on the requirements or policies declared by local authorities. For example, the packaging tax imposed due to local legal obligations.

In this enhancement, the E-Charges & Discounts module is introduced, providing you with the flexibility to apply charges or discounts automatically to sales entries based on the predefined conditions. You can apply charges per sales entry or individual entry line, and discounts per sales entry. This is particularly useful as you can avoid the hassle of entering charges or discounts manually in every sales entry, especially when charges or discounts are commonly applied to the business transactions within a company.

Apart from that, you can reduce the risk of creating incomplete sales entries. All relevant charges or discounts that are applicable will be automatically included in the sales entries. In addition, you can gain detailed insight to overall sales amounts, as the charge or discount amounts are displayed separately from the sales price amounts in the sales entries. It is even possible to exclude charges from settlement discounts. Examples of charges and discounts that can be applied using E-Charges & Discounts are:

Environmental charges for certain items or groups of items,
Charges imposed on recycling and/or packaging items,
Charges applied to a sales order when the order amount is below the minimum amount defined. This is to avoid dropping net margins when the order has too little revenue generated due to high handling costs, and
Bonus discounts granted in percentage to a sales order when the order amount is above a specific amount defined.

Menu path

System/Logistics/Charges/Discounts
System/General/Settings/Documents settings
System/HR & Security/Security roles
CRM/Entries/Quotations
CRM/Reports/Quotations
Invoice/Entries/Direct invoices
Invoice/Entries/Invoices
Invoice/Entries/Print/Process
Invoice/Entries/Recurring invoices/Generate
Invoice/Reports/Invoice history
Order/Entries/Electronic orders
Order/Entries/Fulfillment
Order/Entries/Recurring sales orders/Process
Order/Entries/RMA orders
Order/Entries/Sales orders
Order/Reports/Sales order history
Order/Statistics/Audit trail
XML/Logistic import/Quotations
XML/Logistic import/Sales orders
XML/Logistic import/Sales invoices

What has been changed

The new charge and discount functionality implemented is applicable to sales orders, quotations, invoices, Return to Merchant Authorization (RMA) orders, and sales returns. The following changes are implemented only if you have SE1225 — E-Charges & Discounts and the corresponding SE1200 — E-Order or SE1100 — E-Invoice included in your license:

A new license item SE1225 — E-Charges & Discounts is introduced.
A new menu right Charges/Discounts is added to the Logistics module to grant the access to the relevant menu path. By default, users with the role Administrator have this menu right.

Setting up charges or discounts

A new menu path System/Logistics/Charges/Discounts is added, allowing you to create and maintain the evaluation rules (conditions and calculation method) for charges or discounts.
A new Charges/Discounts screen is introduced where you can define the charges or discounts to be applied to the sales entries such as the general information of the charge or discount code, conditions on when the charge or discount should be applied, and the calculation method for the charge or discount, as shown in the following screen:
The charges or discounts can be applied based on per entry or per entry line basis, according to your defined settings under the Charges/Discounts tab of the Charges/Discounts screen. For more information, see Creating and Maintaining Charges or Discounts.
The Classification(Tax) field and Multiple taxes button are available under the Charges/Discounts tab of the Charges/Discounts screen only if you have selected the Use tax module check box at General ledger settings. Upon saving a charge code, the Multiple taxes button will be enabled for you to maintain the multiple taxes calculations. For more information, see Creating and Maintaining Tax Schedules.
When you choose to perform multiple taxes calculations based on the tax schedule, the following changes are implemented:
- During line charges calculation, the calculation will be performed based on a tax code instead of a VAT code. Therefore, the Tax, Tax basis, Tax amount, and Amount incl. tax columns are available at the Line charges screen, allowing users to view the details of the tax charges.
- At the Discount / Extra charges screen, line charges will be grouped and displayed per charge code and tax code.
- Charges that are calculated based on tax codes can be printed on the relevant sales documents such as quotations, sales order confirmations, or invoices.

Applying line charges at entry line level

When creating a sales entry, line charges are applied and calculated automatically at the entry lines based on the conditions and calculation method defined at the Charges/Discounts screen.
Note: This logic is also applicable to new order entry lines that are added to an existing order entry when the quantity of items received does not tally with the ordered quantity.
The Line charges and Charges columns are added to the sales entry screen for you to view the amount of the line charges and the details at the entry lines. By default, these columns are not displayed. To display these columns, you have to select the Line charges and Charge details check boxes at the Define columns screen. For more information, see Defining Sales Quotation Columns, Defining Sales Order Columns, or Customizing Columns for Invoice or Credit Note Lines.
The system will calculate and display the amount of the line charges at the Line charges column for each entry line once you tab across to the next entry line. You can click under the Charges column to view the detailed breakdown of the line charges.
Line charges will be calculated and displayed only when all the conditions defined under the Conditions tab are met and the items or item groups selected are identical with the items or item groups defined under the Charges/Discounts tab at the Charges/Discounts screen.
If you change the information at the sales entry header section such as the delivery debtor or invoice debtor account, sales entry date, currency, country, or shipping method, a warning message “Evaluation of lines is required to apply the correct charges. Depending on the number of lines / charges, this may to take some time. Continue?” is displayed before you can proceed to evaluate the line charges. Once you have clicked Yes, the system will evaluate the line charges and update the relevant charge amount(s) if line charges are applicable.
If you change the entry line information such as the quantity ordered for an item, the system will recalculate the line charge and update the line charge amount accordingly.
If an entry line is removed, the corresponding line charge applied will be removed as well.
The following Line charges screen displays the detailed breakdown of the line charges after you have clicked on under the Charges column. The information displayed is for viewing purpose only, and cannot be edited.
Alternatively, you can click the Specific button at the entry screen to view a summary of all the line charges per charge code and VAT code at the Discount / Extra charges screen. However, you cannot edit the details of the line charges.

Applying charges or discounts at header (entry) level

A new setting Header charge / discount evaluation is added to the Setting: Dialog section at the Define columns screen of the entry screen. You can select one of the available options: Always, Ask user, or Never to determine whether the evaluation for header charges or discounts is applied when closing or saving a sales entry. For more information, see Defining Sales Quotation Columns, Defining Sales Order Columns, or Customizing Columns for Invoice or Credit Note Lines.
When a sales entry created meets the conditions defined at the Charges/Discounts screen, the relevant header charges or discounts will be applied to the sales entry upon saving or closing the sales entry (this is applicable only if Always or Ask user is selected at Header charge / discount evaluation). You can view the details of the charges or discounts at the Discount / Extra charges screen by clicking the Specific button at the sales entry screen.

Note: If Never is selected at Header charge / discount evaluation, the evaluation for header charges or discounts is not executed upon closing or saving the sales entry. You can trigger the evaluation for header charges or discounts manually after the sales entry is created by using the Charges/Discounts button.
Both of the header charges or discounts and the line charges are displayed at the Discount / Extra charges screen. You can add new header charges or discounts, and edit or delete some of the details (such as the VAT code, Sales price, and Percentage) for existing header charges or discounts. However, the details for line charges cannot be edited. For more information, see Calculating Discounts or Extra Charges.
A new Charges/Discounts button is added to the Discount / Extra charges screen. Clicking on the button triggers the evaluation of the header charges or discounts to be applied to the sales entry manually. This is useful especially when Never is selected at Header charge / discount evaluation. The phantom lines created for charges or discounts during the last evaluation will be removed and replaced by new phantom lines with the correct charges or discounts calculated, with the exception to phantom lines that have been edited manually.
In the case where the phantom lines from the last evaluation were edited manually by the users, the latest evaluation is executed to justify the presence of the header charges or discounts. If header charges or discounts are not applicable, the corresponding phantom lines will be removed. Otherwise, the phantom lines will be remained at the Discount / Extra charges screen without any recalculation.

Implementing charges or discounts in various business processes

When the quotation or order entry lines are split due to certain reasons, such as partial fulfillments, interbranch transfers, or changes to the fulfillment date, the system will split and recalculate the line charges according to the split quantity.
Note: Due to the amount rounding for VAT calculation during lines splitting, there will be a slight difference in the total line charges amount before and after splitting the lines.
During an order completion process, the line charges are updated accordingly based on various situations, as described in the following:
- Order line is fulfilled and invoiced — No changes to the line charges.
- Order line is fulfilled but not invoiced — The system will recalculate the line charges, only when there is an update on the order line details, which leads to the change on the order line net price.
- Order line is not fulfilled and not invoiced — The system will reset the order line quantity to “0.00”, and thus all related line charges will be removed.
- Order line is not fulfilled but is invoiced — The system will create a compensation order line with the amount of “0.00”, and line charges are not applicable to the created compensation order line.
During the fulfillment process where certain taxes (such as the packaging tax) are required to be paid, you can specify whether you want to generate additional tax entries for the tax charges by selecting the Generate fulfillment entry check box under the Charges/Discounts tab at the Charges/Discounts screen. For more information, see Creating and Maintaining Charges or Discounts.

Note: This functionality is only available to line charges with the Amount per unit calculation method.
When there is an order return or credit note to be generated, proper handling of the charges or discounts on the return entries or credit note entries are required, as described in the following:
- Planned sales order return — Applicable to line charges and header charges or discounts based on the defined evaluation rules and dialog settings.
- Unplanned sales order return — The system will debit the line charges from the original sales order line and credit the charges to the entry line for unplanned return automatically. The credited line charges will be printed on a credit note if the return entry line requires a credit note to be generated. If the return entry line is remarked as “To be delivered”, then an order entry line with positive value is generated to offset the return entry line. The generated positive order entry line is considered as a new entry line and thus triggers the evaluation for line charges and header charges or discounts.
- Planned RMA order return — Applicable to line charges based on the defined evaluation rules.
- Manually created credit note — Applicable to line charges and header charges or discounts based on the defined evaluation rules and dialog settings.
- Auto-generated credit note — All the related line charges on the credit note are copied from the corresponding invoice lines, with the exception that the charges will be removed if there is a change to the currency code.
Besides the common entry applications, a sales entry can also be created via the import, copy, or other entry generation methods within the system. When the sales entry is created (regardless of the methods used for the entry creation), the system will execute evaluations at both sales header and sales line levels, and apply the relevant line charges and header charges based on the defined evaluation rules and dialog settings.
When processing a quotation to a sales order or a sales order to an invoice, all the charges or discounts applied in the original entry will be inherited by the next relevant processing step.
When an invoice is processed from a sales order, the following changes are implemented:
- Users can edit or remove the header charges or discounts applied to the invoice.
- Users can add new invoice lines that will be evaluated automatically for line charges.
- Lines charges originating from sales order lines can only be viewed but cannot be edited.
- When the invoice is deleted, the quantity invoiced in the corresponding sales order lines will be updated accordingly and the invoiced status of the related line charges will be reset.
- If a line charge is defined to be excluded from the settlement discount, then the particular charge amount will not be included in the settlement discount calculation during the invoicing process.

Layouts

A new Line charges block is added to the layout.
The Charge/Discount code, Charge amount excluding VAT, Charge amount including VAT, Currency abbreviation, Currency character, Currency code, Currency description, Description, Quantity (in sales units), Percentage, Unit amount, VAT amount, VAT code, VAT description, VAT percentage, Weight factor, and Quantity (in sales units) * Weight factor database fields are added to the Line charges block.
The Line charges database field is added to the Item block and Text line block.
The Percentage database field is added to the Extra charges block.
You can display and print the line charges and the total charges amount on the relevant sales documents after customizing the document layouts with the new Line charges block and corresponding database fields. For more information, see Creating and Maintaining Layouts.

Note: The EDI implementation does not support the charges and discounts functionalities described in this release note.