If you are using (Invoice Discount Amount) feature on Sales or Purchase Invoices on Microsoft Dynamics NAV, you may wonder, if you have multiple item lines with different prices, how the system distribute the discount amount on all document lines. That’s what we are going to discover in this post.
Let’s assume first we have 1 Line item Code is “X01” and it’s Qty on Invoice equal to 1 PCS. Let’s see the STANDARD NAV In Scenario Number 1.
Scenario 1: Item Without Invoice Discount
Item Unit Cost = 100 EGP
Unit Cost Exclude VAT = 100 EGP
VAT Percentage = 25%
VAT Amount = 25
The Total Invoice will be = 100 + (100*25%) = 125 EGP
Scenario 2: Item With Invoice Discount Amount 10 EGP
Discount Amount = 10 EGP
Unit Cost Exclude VAT = (100-10)= 90 EGP
VAT Amount = 22.5 EGP
The Total Invoice will be = 90+ (100*25%) = 112.5 EGP
You will Notice the following:
Scenario 3: 2 Item Without Invoice Discount
To accomplish this scenario, let’s assume we have the same item Code “X01” and another item “X02”. The Item Unit Cost for “X02” is = 20 EGP.
Let’s see the calculation of the total invoice as STANDARD NAV:
Scenario 4: 2 Item With Invoice Discount Amount 10 EGP
Here we will know how the Invoice Discount Amount distributed on every line item.
Automatically the system first will calculate the weight of every item based on Unit Cost, as shown in (Discount Weight) Column. (This column not NAV Field-Just for Understanding)
X01: (100 EGP) / (100 EGP + 20 EGP) * 100 = 83.33%
X02: (20 EGP) / (100 EGP + 20 EGP) * 100 = 16.67%
Then the Invoice Discount Amount (10 EGP) will be distributed based on this percentage as shown in (Discount) Column.
X01: 10 EGP * 83.33% = 8.33 EGP
X02: 10 EGP * 16.67% = 1.67 EGP
Hope this example help you understand the concepts of Microsoft Dynamics NAV when calculating invoice discount and the distribution of the discount for every item line.