Concepts

Discount Management breaks down the discount effect of a sales order line into separate calculated amounts.

This makes it possible to analyze discount sources separately and, when needed, record them by category for distribution and posting.

Calculated discount amounts

Each sales order line can contain five calculated discount amounts:

• Level 1 Discount Amount
• Level 2 Discount Amount
• Level 3 Discount Amount
• Bonus Program Amount
• Promotional Package Amount

These amounts are calculated automatically from the discount sources applied to the line.

Calculation model

The system calculates the discount amounts as separate components of the final line discount.

Each component is calculated by applying the corresponding discount percent to a specific base amount.

The base amount depends on the discount source:

• some discounts are calculated on the original line amount;
• some discounts are calculated on the remaining amount after the standard line discount levels that are applied on the line, if any.

The original line amount is:

Quantity × Unit Price

Each component amount is rounded to two decimal places before the final reconciliation step.

Standard line discount levels

The three standard line discount levels are calculated in cascade:

• Level 1 Discount Amount is calculated on the original line amount;
• Level 2 Discount Amount is calculated on the remaining amount after level 1;
• Level 3 Discount Amount is calculated on the remaining amount after levels 1 and 2.

This means that each next level uses a reduced base.

Example

Suppose a sales order line has:

• Quantity = 10
• Unit Price = 100.00

The original line amount is:

10 × 100.00 = 1,000.00

If the applied line discount percentages are:

• Level 1 Discount Percent = 10%
• Level 2 Discount Percent = 5%
• Level 3 Discount Percent = 2%

then the calculated amounts are:

• Level 1 Discount Amount = 1,000.00 × 10% = 100.00
• Level 2 Discount Amount = (1,000.00 - 100.00) × 5% = 45.00
• Level 3 Discount Amount = (1,000.00 - 100.00 - 45.00) × 2% = 17.10

Bonus programs

Bonus programs can also contribute a separate discount amount.

The Bonus Program Amount is calculated by applying the Bonus Line Discount Percent from the applied bonus program to the applicable line base amount.

Its behavior depends on Bonus Action:

• Discount applies the bonus percent to the original line amount;
• Cascade discount applies the bonus percent to the amount remaining after the standard line discount levels that are applied on the line, if any.

Example

Suppose a sales order line has:

• Quantity = 10
• Unit Price = 100.00

The original line amount is:

10 × 100.00 = 1,000.00

Suppose also that a bonus program is applied with:

• Bonus Line Discount Percent = 3%

Then the result depends on Bonus Action.

If Bonus Action is Discount, the bonus percent is applied to the original line amount:

• Bonus Program Amount = 1,000.00 × 3% = 30.00

If Bonus Action is Cascade discount, the bonus percent is applied to the amount remaining after the standard line discount levels that are applied on the line, if any.

For example, if the applied standard line discount levels reduce the line amount to 837.90, then:

• Bonus Program Amount = 837.90 × 3% = 25.14

Promotional packages

Promotional packages can also contribute a separate discount amount.

The Promotional Package Amount is calculated by applying the Standard Discount Percent Adjust from the applied promotional package line to the applicable line base amount.

Its behavior depends on the package line setup:

• Add applies the promotional percent to the original line amount;
• Replace applies the promotional percent to the original line amount;
• MarkDown applies the promotional percent to the amount remaining after the standard line discount levels that are applied on the line, if any.

Example

Suppose a sales order line has:

• Quantity = 10
• Unit Price = 100.00

The original line amount is:

10 × 100.00 = 1,000.00

Suppose also that an applied promotional package line has:

• Standard Discount Percent Adjust = 4%

Then the result depends on the promotional package line setup.

If the setup is Add or Replace, the promotional percent is applied to the original line amount:

• Promotional Package Amount = 1,000.00 × 4% = 40.00

If the setup is MarkDown, the promotional percent is applied to the amount remaining after the standard line discount levels that are applied on the line, if any.

For example, if the applied standard line discount levels reduce the line amount to 837.90, then:

• Promotional Package Amount = 837.90 × 4% = 33.516, rounded to 33.52

Rounding and reconciliation

Each discount component is rounded separately to two decimal places.

To reconcile these separately rounded components with the final discount applied on the line, the system also determines the final line standard discount percent for the sales order line.

It then applies that percent to the original line amount to calculate the total line discount amount and compares it with the sum of the five component amounts.

Because the components are rounded separately, a rounding difference can appear.

If this happens, the difference is assigned to the largest discount component.

This ensures that the sum of the component amounts matches the final rounded line discount amount of the sales order line.

The calculated component amounts are returned in the sales order document currency.
They are typically negative for regular sales lines and positive for lines with negative amount, such as return lines.

Categorized additional amounts

A calculated discount amount becomes part of discount categorization only when its discount source is assigned to a Document Amount Type.

In this model:

• the Document Amount Type defines the discount category;
• the calculated discount amount provides the category value.

This makes the discount visible not only as a line-level calculation result, but also as a categorized amount that can later be distributed and posted.

For setup details, see Configuration.

Distributed amounts in the sales order

After the categorized additional amounts are created, the system distributes them to the affected sales order lines.

This distribution is based on the calculated discount amount contributed by the applied source on each line.

As a result, the Document Distributed Amounts panel shows which part of each discount category belongs to each sales order line.

For more information about the general mechanism for calculating and distributing additional amounts through document lines, see Additional amounts determination and recording and Amounts distribution.