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Settlement discounts

The University attempts to obtain the maximum discount possible when settling claims with its suppliers.

Early payment discounts, and any other variation in trading terms, must be negotiated with the Purchasing section prior to the issuing of a University purchase order.

Where a special settlement discount has been negotiated, the financial unit receives the benefit of the discount. This is achieved by raising the order for the net amount of the purchase (that is, reducing the purchase price in anticipation of the settlement discount). The financial unit will be charged only for the net amount. Make sure you note the terms for the payment on the requisition and in Finance One.

All other settlement discounts, including any for the University's normal terms of payment, are retained by the central administration for inclusion in the following year's budget allocations. Therefore the order is raised for the gross value of the purchase and the settlement discount is deducted by Accounting Payable when paying the Invoice.


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