A customer deduction described as an early-payment discount should be checked against the agreed terms before the balance is cleared. A short payment and a remittance label do not prove that the company accepted a discount.

Accounting records, calculator and glasses on a desk
Illustrative photograph by Cht Gsml.

Match the settlement

Keep the invoice, payment date, bank receipt and remittance advice. Identify the amount deducted and the invoice allocation. Check whether the receipt settles several invoices or includes a separate credit that may explain the difference.

Review the agreed terms

Retrieve the quotation, order, contract and relevant correspondence. Ask the authorised commercial owner whether a discount was offered and whether its conditions were met. Finance should not create a credit note merely to make the customer account agree with the bank.

Example: the customer uses its own policy

The customer's remittance deducts a percentage for paying early, but the company's accepted terms contain no such discount. Keep the deduction open for enquiry and record the commercial decision. Do not automatically classify it as a bank fee or bad debt.

Retain the accepted outcome

Link any approved credit, further receipt or dispute correspondence to the original invoice. Ask the accountant to review the accounting and GST consequences of the actual outcome. A supported settlement trail avoids repeated collection of an amount already resolved or accidental waiver of one still due.

Related practical guidance

For the surrounding records and responsibilities, see bookkeeping basics, company records to keep, bookkeeping and accounting.

Official guidance: IRAS official guidance.

Help with your company records

For accounting, bookkeeping and related compliance support, contact Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Tell us which records or process need attention so we can discuss the relevant next steps.