Invoicing: Discounts and Surcharges

Subjects in this section

• Global discount/surcharge Applying discounts to all clients.
• Altering discount/surcharge per client Setting rates for individual clients.
• Special drug discounts The two methods of discounting drugs.
• Apply surcharges Controlling when surcharges are added.
• Edit surcharge/discount amounts Correcting user errors.
• General notes on discounts/surcharges

To configure the global discount/surcharge settings select Discount/surcharge structure from the Invoice production menu. Premvet 5 will display the current settings, for example:

1.  Discounts are IMPLEMENTED
2.  Discount figure is a PERCENTAGE
3.  Discount figure is 5.000
4.  Discount to be taken for payment within 30 days
5.  Discount VAT NOT deducted at time of sale
6.  Discount determined 2 3
7.  Special drug discount is IMPLEMENTED
8.  Surcharges are NOT implemented.


14.  Amend default discount fields and S.D.D.
15.  Return to the menu

You will notice that options 9-13, which deal with the configuration of surcharges, are missing from the above example. Premvet 5 doesn't display them because surcharges are turned off at option 8. Similarly, if discounts were not implemented then options 2 to 5 would not appear on the menu. The options have the following functions:

Option 5 - Discount VAT
This controls how the system will treat VAT when discounts are implemented. If set to 'VAT deducted' then the VAT will be corrected when the transaction is added to the system, i.e. at time of sale. For obvious reasons this method of dealing with the VAT is only suitable in cases where there is a straightforward system of discounting which is never likely to change. The alternative is to apply VAT to the discount when it is deducted.

Options 6 and 13 - 'Discount/surcharge based on'
If you are planning to use discount and surcharges the first thing you need to do is tell the system on what figures the discount applies to.

To see the current settings or change the current method select either 6 or 13. (6 refers to the discount amount while 13 refers to the surcharge amount). The example below refers to discounts. The layout for surcharges is almost identical.

Discounts determined : Old settings : 10 9 8 7 11

1.  Brought forward
2.  Total month's fees (Ex Credits)
3.  Total month's drugs (Ex Credits)
4.  Payments this month
5.  Total work this month
6.  VAT this month
7.  Aged (Current)
8.  Aged (30 days)
9.  Aged (60 days)
10.  Aged (90 days)
11.  Aged (>120 days)
12.  Total month's fees
13.  Total month's drugs
14.  Month's surcharge

The existing settings are highlighted and displayed numerically at the top of the screen. You will be asked if you want to change these. If so the highlight lines will disappear, allowing you to reselect as appropriate. If you answered 'Y' by mistake, use the numeric list at the top and re-enter the previous settings.

Each of the definitions above refers to a figure which may exist on a client's account - they might owe 12.70 in 'Total work this month', for example. If indicated, Premvet 5 will tally that figure with any others you have selected, and then apply your discount to the total. A description of these amounts is as follows:

1. Brought forward. The amount of money outstanding carried over from previous months.
   (Composite invoices, which are designed to display the complete account status of clients with multiple animals, contain an option to suppress the 'balance brought forward' line. If you are not suppressing this line, then records with only a B/F will still be shown in the body of the invoice.)
2. Total month's fees. The total fees this month (excluding credits and surcharges).
3. Total month's drugs.As 2) except relates to drugs.
4. Payments this month. Any money received this month (including discounts taken). This will obviously be a negative amount to balance out the final figure.
5. Total work this month.The total amount invoiced for the MONTH in question. (Excluding brought forward and payments, but including VAT).
6. VAT this month. The total amount of VAT on this month's bill.

   (7-11) These figures relate to the amount of money that has been outstanding for the periods referred to.

12. Total month's fees. All fees for the month including credits and any applied surcharges.
13. Total month's drugs. As 12) except it relates to drugs.
14. Month's surcharge - Any applied surcharge added this month. Again, this should be a negative figure to balance the final amount.

Some examples

If you want to...	Select these options:
Discount based on fees and drugs this month (excluding credits and payments)	2,3
Discount based on fees and drugs, excluding applied surcharge but including any credits	2,3,14
Surcharge based on brought forward amount less any payments made during the month	1, 4
Surcharge based on invoice 'bottom line'	1, 4, 5
Surcharge based on outstanding amount after 61 days	9, 10, 11

Altering Discount/Surcharge Per Client

Return to the screen we began with - Discount/surcharge structure from the Invoice Production menu:

1.  Discounts are IMPLEMENTED
2.  Discount figure is a PERCENTAGE
3.  Discount figure is 5.000
4.  Discount to be taken for payment within 30 days
5.  Discount VAT NOT deducted at time of sale
6.  Discount determined 2 3
7.  Special drug discount is IMPLEMENTED
8.  Surcharges are NOT implemented.


14.  Amend default discount fields and S.D.D.
15.  Return to the menu

You will notice that option 14 is not related to the other surcharge and discount options. In fact, this is where you enable different discounts for different groups of clients. If you select this option, you will see there are twenty different discount bands, each allocated a letter of the alphabet. The first ten (A-J) are for indicating percentage discounts, the second ten (K-T) are for indicating discounts of absolute amounts. It is up to you to decide the value of each band, e.g. A 2%, B 5%, C 7.5% etc.

Once you have indicated the value of your discount bands you can begin offering discounts on a client by client basis. To do this, bring up the management record card for the client concerned. You will see a field marked "Discount" which is designed to contain up to four characters.

• Change the FIRST character of this field to the letter of the alphabet which refers to the discount band you want this client to have. If you leave this character blank, or as a hyphen (-), the global discount (described above) will apply.

The discount bands are also used to set up different surcharge bands and different special drug discount rates.

• To implement a different surcharge rate to the global setting, change the SECOND character in the discount field to the appropriate letter of the alphabet.
• Special drug discount rates are controlled by the THIRD character.
• Invisible discounts/surcharges are controlled by the FOURTH character. For invisible discounts use the discount bands in the normal way. If invisible surcharges are required, then set up a discount band with a NEGATIVE percentage, e.g -7.5%

To sum up, the fields indicate:

1. Discount letter
2. Surcharge letter
3. Special drug discount
4. Invisible discount/surcharge

Separate discounts for fees against drugs
There are occasions where you may want to split the discount the client gets based on Fees and Drugs. This can be done (via Auto Pricing only). Setup one or more of the variable bands U-Y. Put into the Fees column the fees component discount, and the drugs component in the Drugs column e.g.

Band	Fees  Drugs
 U 	20    50     20% off of Fees and 50% off of Drugs
 V 	0     20     Fees full price, drugs 20% off

Discount:  ---U

Band	Fees  Drugs
 U 	100   5      Fees free!!, 5% off drugs
 V 	0     -1     Fees full price, Drugs at cost
 W 	0     -2     Fees full price, Drugs NO VAT

Note: If you use any AP codes that change the status then you will need to manually change the status field back.

Note: If you put the animal to sleep or it dies, status code DD, then all work added after the event will be at the current VAT rate.

Invisible discounts
The invisible discount/surcharge band is used by automatic pricing and manual text entries and automatically discounts all prices for that client by the percentage band indicated. Alternatively, for an invisible surcharge to be given to a client, set up a discount band to have a negative percentage and use this in their discount field. Absolute amounts can be discounted or surcharged invisibly in the same way by using bands referred to by letters of the alphabet from K onwards.

The only way to tell if a clinical line has had one of these discount or surcharges applied is to compare the prices with those charged normally. The fact that a discount or a surcharge has taken place is completely transparent to the client (and user).

Timed surcharge
An invisible surcharge based on time of day is available and can be set up via Automatic pricing -> Utilities -> Mileage -> Timed surcharge.

This works in a similar way to the invisible surcharge which can be set up on a client by client basis. It uses the discount/surcharge bands (A-J for percentage surcharges, and K-T for absolute amounts) which are set up on the invoice production menu (Discount/surcharge structure). You specify what time to switch the discount or surcharge on, and when to switch it off. Only one surcharge is available for use.

Special Drug Discounts

1. The discount is determined automatically when an invoice is produced. You may have different discount amounts for different stock items.
2. You can run the 'Set-special drug discount program' which will search through each client and set the discount. This has the advantage over (a) above in that you have wider scope to alter the amount of the discount on a client by client basis. The disadvantage is that it is slower and it must be run BEFORE the invoices.

Method A
All the items you carry in stock can be defined in terms of their analysis code. Antiobiotics, for example, may have an analysis code of 240. Under this method of discounting drugs you can set up five different 'bands' of discount relating to specific analysis codes. For example:

Band No.	Analysis Code	Discount
1	240	2.5%
	254	5%
	241	0%
	242	0.5%
2	240	5%
	254	7.5%
etc, etc.	....	...

Note: For the system to use this method you MUST set option Invoicing -> Discounts -> 7. to Special drug discount is Implemented (Via invoice). You cannot use this method AND the 'Set special drug discount' program.

Method B
The Set-special drug discount program checks each client, working out the special drug discount due so that it can be used in the billing run.The program can be found on the Invoice production menu. Premvet 5 will prompt you for the client to start on, the client to end on and the client type on which to run the function - making the allocation of discounts more flexible than Method A (described above).

In order to set the discount scale, enter an 'S' at the Continue Y/N prompt. This will give you the current discount settings e.g.

100.00			2.500
300.00			3.500
500.00			4.000

Up to 100.00    No discount
100-299         2.5%
300-499         3.5%
over 500        4%

You can set the discount to apply only where certain analysis codes are used when you see the prompt:

Calculate s.d.d. on <A>ll or <S>pecific analysis codes? [A]

If 'S' for specific is answered, the user is asked:

Analysis code to calculate on? [240]

You can enter any stock analysis code you've defined.

Premvet 5 then asks for a date range over which to apply the discount. By default, this is set to the beginning and end of the current month. You will also be asked a minimum figure, below which the discount will not apply. If the amount of drugs purchased is below this then the record will be skipped. The system will finally ask whether you wish to manually confirm the amount discounted to each client. Following a run, the discount will be printed at the foot of the invoice.

Note:As this program is run at the end of the month there is no way that the special drug discount which will be awarded can be known at the time the transaction is entered on to the system. It is therefore not possible to have special drug discounts and to have discount VAT deducted at the time of sale.

Apply surcharges

Surcharges within the system can work in two different ways:

1. As the invoice is being printed the surcharge is worked out and added to the client's record. The system adds the message 'A surcharge has been added it may be deducted if paid by [date]'. This is called an automatic surcharge and is covered later.
2. A message can be added to the invoice worded 'A surcharge will be added if not paid by [date]'. If the client pays during the month the surcharge will be cancelled. At the end of the month you will need to run the Apply Surcharges program BEFORE the billing run takes place.

   To apply surcharges of type (b), use the option Apply surcharges located in Invoice production - Print bills.

   This program is used to apply late payment surcharges. Any surcharges threatened at the last billing run are added to the appropriate clients' records, unless a payment has been received and the surcharge cancelled.

   The program will add a transaction to each of the clients that it applies to.

Edit surcharge/discount amounts

The surcharge and discount totals are stored ready to be used by the invoicing program (and payment routine). The option Edit surc/Disc. totals (accessed via Invoice production - Print bills) allows you to edit these figures if required. You may have forgotten to cancel a surcharge (or apply a discount) for a specific client. Under normal circumstances you would probably not use this option regularly, if at all.

You will be prompted for the client number and the screen will display the current setting for this client, allowing you to edit the data, e.g.

1.  Total billed     146.20
2.  Discount 		.00
3.  Surcharge 		.00
4.  Last billed date    01.01.89
5.
6.  Drug discount 	.00

1. Any entry in the discount field on the management record overrides any global discount set up. No global discount needs to exist.
2. If there is an automatic surcharge this means you can't run bills twice or make more than one copy, as the surcharge will also be duplicated. You can generate 'copy' invoices instead.
3. If the surcharge is not automatic, then it will need to be applied (Invoice production - Print bills - Apply surcharges).
4. The system will not automatically add surcharges after the number of days mentioned in the message on the bill. This needs to be completed by the billing program (in the case of automatic surcharges) or by the add surcharges program (for non-automatic surcharges).
5. At the time of payment, the amount of discount to be given can be overridden at your discretion (for instance if there has been a part payment). You can also decide whether to abandon the threat of a non- automatic surcharge or not.
6. You cannot have varying periods at which to give discounts e.g. some at 30 days, others at 60 etc. The same applies to surcharges. Manual calculation is needed in such cases.
7. The special drug discount feature is not automatic.

Surcharges

1. Work out the amount the surcharge is to be based on using the figures in 'Surcharge determined'.
2. If the figure to base the surcharge on is negative or zero then skip surcharges.
3. Examine the surcharge field on the client's record (the 2nd position in the discount field). If this contains a '-', '0' or is blank then use the global surcharge figure. Otherwise relate the surcharge band to those set up and use the corresponding amount (which can be zero for no surcharge).
4. Use the figure determined in b) and the figure from c) to work out the surcharge amount. If this is zero then skip surcharges.
5. If automatic surcharges are switched on (and the invoice run is being printed) add a clinical line to the client's record. This line will be dated with the 'Invoice date', with the surcharge wording set up earlier and the analysis code as '253'.
6. Print at the foot of the bill:
   1. If NOT using automatic surcharges -

      A 'Surcharge text' of 'surcharge amount' will be added if not paid  by 
      'date'.
      

      e.g.

      A Credit charge of 20.63 will be added if NOT paid by 26.02.92
      

      If a statement is generated then you get something like this:

      A Surcharge of 12.72 will be added if NOT paid by 26.02.91
      

   2. If automatic surcharges are set to 'Yes' then -

      A 'Surcharge text' of 'amount' has been added. 
      It may be deducted if paid by 'date'
      

      e.g.

      A Surcharge of 20.63 has been added to this account.
      It may be deducted if paid by 26.02.92
      

Discounts
The steps followed when determining a discount are as follows:

1. Work out the amount the discount is to be based on using the figures in 'Discount determined' on the set up screen.
2. If the figure to base the discount on is negative or zero then skip the discount.
3. Examine the discount field on the client's record (the 1st position in the discount field). If this contains a '-', '0' or is blank then use the global discount figure. Otherwise relate the discount band and use the corresponding amount (which can be zero for no discount).
4. Use the figure determined in b) and the figure from c) and work out the discount amount. If this is zero then skip discounts.
5. Print at the foot of the bill:

   A  'Discount  text' of 'discount amount' can be deducted  if  paid  by 
   'date'.
   

Drug discounts
The steps followed when determining a drug discount are as follows:

1. If special drug discount is switched off then do not work it out.
2. If the drug discount is to be determined by the invoice program then use the figures worked out (See the drug discount table). Otherwise check and see if the 'Set special drug discount' program has been run and use that figure instead.
3. Print at the foot of the bill:

   A drug discount of 'drug amount' may be deducted if paid by 'date'.