Supplier cash discount records should explain why the company paid less than the invoiced balance and how the supplier accepted that reduction. Retain the genuine terms, credit or other supporting evidence. A smaller bank payment does not by itself prove that the payable was settled in full.

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

Confirm the accepted terms

Identify the supplier, invoice, discount condition and relevant dates. Ask whether the reduction was agreed before payment and whether the company met the condition. Separate an early-payment discount from a disputed charge, deduction or withholding.

Keep correspondence from the verified supplier contact. An internal note saying discount taken may record the company’s intention without showing that the supplier agreed.

Reconcile the components

Show the invoiced amount, supported reduction, payment and remaining balance. Check whether a credit note is expected or already recorded. Ask the accountant about the required accounting and GST treatment rather than using a general write-off account by default.

If software automatically applies discounts, compare its result with the actual terms. Do not also post a manual adjustment for the same reduction.

Example: payment arrives after the qualifying date

The company pays the discounted amount but the supplier says the condition was not met. Keep the difference open while the purchasing or finance owner resolves the issue. Do not mark the balance paid simply because the bank transfer succeeded.

Close with the supplier position

Match the final supplier statement and approved ledger treatment. Retain the decision and any later payment or credit. A clear reconciliation lets the next reviewer distinguish a genuine discount from an outstanding debt without reconstructing the transaction from bank entries alone.

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.