Automatic Group Vendor Discounts: Implementation Activity

In this activity, you will learn how to configure and apply an automatic vendor discount that is based on the amount or quantity in one line or in a group of document lines.

Story

Starting in January 2019, Blueline Advertising introduced a new discounting policy, offering its customers a 10% discount if they order billboard production and installation services worth of $3000 or more.

On January 30, 2019 SweetLife purchased the development of two new billboard designs as well as the production and installation of 6 billboards. Blueline charges 2 billable hours per installation of a single billboard.

Acting as the SweetLife accountant, you first define the group vendor discount. Then you create a bill for Blueline reflecting the purchase, and after that you review how the group discount is applied to the bill.

Process Overview

To configure a group-level vendor discount, you create a discount code on the Vendor Discount Codes (AP204000) form and then configure a discount sequence on the Vendor Discounts (AP205000) form.

On the Bills and Adjustments (AP301000) form, you create an AP bill with lines to which these discounts may be applied. You then review how the discounts you have configured are applied automatically.

Before You Proceed

Before you start the lesson, do the following:

  1. Launch the MYOB Advanced website, and sign in as an accountant by using the johnson login and the 123 password.
  2. In the info area, in the upper-right corner of the top pane of the MYOB Advanced screen, make sure that the business date in your system is set to 01/30/2019. If a different date is displayed, click the Business Date menu button and select 01/30/2019. For simplicity, in this lesson, you will create and process all documents in the system on this business date.
  3. On the Company and Branch Selection menu, also on the top pane of the MYOB Advanced screen, make sure that the SweetLife Head Office and Wholesale Center branch is selected. If it is not selected, click the Company and Branch Selection menu to view the list of branches that you have access to, and then click SweetLife Head Office and Wholesale Center.

Step 1: Configure the Group Vendor Discount by Percent

To configure an automatic group discount by amount for the BILLBPROD and BILLBINSTA non-stock items purchased from Blueline, do the following:

  1. Open the Vendor Discount Codes (AP204000) form.
  2. In the Selection area, in the Vendor box, select BLUELINE.
  3. On the form toolbar, click Add Row, and specify the following settings in the added row:
    • Discount Code: GRIT00000
    • Description: Automatic group discount for specific items
    • Discount Type: Group
    • Applicable To: Item
    • Auto-Numbering: Selected

    With these settings, discounts configured based on this discount code will be applicable to groups of lines containing specific items; because the Manual check box is cleared, these group discounts will be applied automatically.

  4. On the form toolbar, click Save.
  5. Open the Vendor Discounts (AP205000) form.
  6. On the form toolbar, click Add New Record, and specify the following settings in the Summary area:
    • Vendor: BLUELINE
    • Discount Code: GRIT00000
    • Discount by: Percent
    • Break by: Amount
    • Active: Selected
    • Description: Automatic group discount for specific items - By Percent

    These settings convey that this discount (of the discount code you just defined for group discounts that are applicable to specific items) is applicable to multiple lines containing specific items and is calculated as a percentage of the amount in these lines.

  7. On the Discount Breakpoints tab, click Add Row on the table toolbar, and specify the following settings in the added row:
    • Pending Break Amount: 3000
    • Pending Discount Percent: 10
    • Pending Date: 1/1/2019

    With these settings, the discount of 10% is applicable to the document if the amount of a line or a group of lines containing specific items is equal to or more than $3000.

  8. On the Items tab, click Add Row and in the Inventory ID column select BILLBPROD. Then add another row and in the Inventory ID column, select BILLBINSTA.

    These settings imply that the discount will be applied to a document if the amount in all lines containing the BILLBPROD and BILLBINSTA non-stock items is larger than $3000.

  9. On the form toolbar, click Save.
  10. On the form toolbar, click Update Discounts.
  11. In the Update Discounts dialog box, which opens, leave the default value (1/30/2019) in the Filter Date box, and click OK.

Step 2: Create the AP Bill for Blueline and Explore Discount Application

To create the bill for Blueline Advertising and explore how the automatic group discount is applied, do the following:

  1. Open the Bills and Adjustments (AP301000) form.
  2. On the form toolbar, click Add New Record, and specify the following settings in the Summary area:
    • Type: Bill
    • Vendor: BLUELINE
    • Date: 1/30/2019 (inserted by default)
    • Description: Design, production, and installation of billboards - January 2019
  3. On the Document Details tab, click Add Row, and specify the following settings in the added row:
    • Branch: HEADOFFICE
    • Inventory ID: BILLBDESIG
    • Quantity: 2
    • Unit Cost: 1000
  4. While you are still on Document Details tab, add two more rows with the following settings:
    • Branch: HEADOFFICE
    • Inventory ID: BILLBPROD
    • Quantity: 6
    • Unit Cost: 300
    • Branch: HEADOFFICE
    • Inventory ID: BILLBINSTA
    • Quantity: 12
    • Unit Cost: 80

    Notice that the sum of amounts for the BILLBPROD and BILLBINSTA items is $2,760, which is less than the break point of the group discount you defined in Step 1, so the discount has not been applied.

  5. On the Document Details tab, change the quantity of the BILLBPROD item to 8.
  6. On the form toolbar, click Actions > Recalculate Prices.
  7. In the Recalculate Prices window, which opens, leave the default values and click OK.
  8. On the Discount Details tab, notice that there is now a row corresponding to the group discount you configured in Step 1, with the discount code and discount sequence specified in the Discount Code and Sequence ID columns. The Discount Percent column contains the discount percentage that you have configured in the discount sequence, and the Discount Amt. is the amount of the discount calculated based on this percentage. The value in the Discountable Amt. column is the sum of amounts in the lines containing the BILLBPROD and BILLBINSTA items, to which the discount has been applied. Notice also that the Discount Total box of the Summary area
  9. In the Summary area, clear the Hold check box, and on the form toolbar, click Release to release the bill.
  10. On the Financial Details tab, click the link in the Batch Nbr. box to review the GL batch, which the system opens in a pop-up window on the Journal Transactions (GL301000) form.

    The 20000 - Accounts Payable account is credited and the 61000 - Advertising Expense account is debited in the amount of the bill. Notice that the discount applied to the group of lines is credited to the 49000 - Discount Taken account.

Step 3: Make the Created Discounts Inactive

To make the discounts you created in this activity inactive so that they will not affect other documents later, do the following:

  1. Open the Vendor Discounts (AP205000) form.
  2. In the Discount Code box, select GRIT00000.
  3. In the Sequence box, select GRIT00000.
  4. In the Summary area, clear the Active check box; save the discount.