When to use gross or net of discounts

TABLE OF CONTENTS

• Introduction

Introduction

When you create a new % Discount charge item in Fees > Setup > Charge and Discount Structure you have the option to set the charge to calculate as either Gross or Net of Discount. Engage Fees will calculate discounts allocated from the same charge group in the order that they appear in the Charge and Discount Structure to the charges that sit above it. If you have two discounts allocated marked Gross, they will be calculated on the full value of the charge they relate to.

Example 1

Fee Charge                                                               1000.00

Discount 1 (10% Gross = 1000 x 10%)                     (100.00)

Discount 2 (10% Gross = 1000 x 10%)                     (100.00)

If you have two discounts allocated that are both marked Net of Discount or the first is Gross and subsequent discounts are marked Net of Discount, the first discount will be calculated on the full value of the charge it relates to and the second and subsequent discounts will be calculated on net of the original fee charged less the discounts already applied.

Example 2

Fee charge                                                                           1000.00

Discount 1 (10% Gross/Net of discount = 1000 x 10%)        (100.00)

Discount 2 (10% Net of discount = 900 x 10%)                      (90.00)

For more information on working with the Discounts see the Engage Fees Setup guide Charge and Discount Structure section.