Introduction

In the Summer 19 Release, Kimble has introduced the ability to apply Discount Schemes to Accounts and Proposals.

The Discounting Enhancements enable you to:

Set up a Discount Scheme for Accounts or Proposals. Schemes set at the Account level apply to all services within the Account, while schemes set at the Proposal level apply to all services within that Proposal.
Set a flat-rate Discount Scheme for a proposal that can be overridden at the individual Assignment level.
Timebox the Discount Schemes for Accounts so that they have a set end date. Proposal-level Discount Schemes last for the duration of the Proposal and are extended with it.
Apply discounts at different points of the scheme period, such as each month or once at the end of the period.
Set different levels of discount with associated spend thresholds.
Set up products to which the Discount Scheme does not apply, such as software, or physical goods with a less flexible pricing structure.
Control whether Discounts are included in Recognized Revenue or not, so that Engagement Managers know whether they are working to the pre- or post-discounted Revenue value.
Include Discounts as a negative-value item in Invoices.
Create reports detailing periodic discounts that have been allocated to Elements.

For example, you might set up Discount Schemes to calculate a total discount for a client over a calendar year. If the client purchases $100k of services from you, you will offer them a 5% discount. However, if they purchase $150k of services, you will increase the discount to 7%. At the end of the year, the discount is applied to all purchases throughout the year.

Or, you might set up a Discount Scheme on a monthly basis to encourage a client to purchase services earlier in the year by offering them a 2% discount each month when their year-to-date purchases reach $50k, and then a larger 5% discount each month when they reach $100k. By applying the discount and invoicing the client each month, until they reach the first tier, they do not receive a discount.

Essential Concepts

Discount Scheme Models

The Scheme Model determines whether a discount scheme applies to a Proposal or an Account, whether the discount is applied at the end of the Discount Scheme term or periodically throughout the life of the scheme, and whether it is a flat-rate (single discount applied to all spend) or tiered-rate (discount applied to spend above a threshold only) scheme.

Calculation Term

The time period in which the discount is calculated and accumulated. This could be cumulative across the whole life of the Discount Scheme, or it could be recalculated periodically, for example if you wanted to encourage a certain monthly spend, you might measure whether a client has reached a spend threshold each month. The Calculation Term works with the Application Term to determine when a client receives a discount.

A flat-rate discount without a threshold does not have a Calculation Term because the discount is applied regardless of spend.

Application Term

The time period in which the discount is applied. This could be the whole life of the Discount Scheme, in which case it would be applied at the end of the scheme, or it could be applied periodically, for example if you invoiced a client monthly, you could apply the discount monthly, so they would receive any discount for which they were eligible with every invoice. The Application Term works with the Calculation Term to determine when a client receives a discount.

A flat-rate discount without a threshold does not have an Application Term because the discount is applied regardless of spend.

Flat-rate Discount Scheme

A flat-rate Discount scheme applies a single discount to all spend within the time period in which the discount applies. If thresholds are used, a discount percentage is assigned to each threshold. The customer benefits from the discount linked to the highest threshold that they reach within the period. This discount is back dated to the start of the period and applies to pre- and post-threshold spend.

Tiered-rate Discount Scheme

A tiered-rate Discount Scheme uses thresholds to apply different levels of discount for the customer. A discount percentage is assigned to each threshold used. When a threshold is reached, the associated discount is applied to any spend above that threshold. If multiple thresholds are used, each threshold has a discount tier associated with it, and any customer spend within that tier receives the associated discount.

Enabling Discounting in your Organization

To enable the Discount Schemes functionality in your Organization:

Navigate to Reference Data >> Kimble Config and toggle on: Discounts > Enable Discounts

There are two additional Discount settings that affect how Discount Schemes are applied to your Organization:

Include Discount in Revenue Recognition
Toggle this setting on if you want to apply the Discount to Recognized Revenue for an Element, meaning that it appears in the Actual Revenue in the Engagement Dashboard. Toggle the setting off to keep Recognized Revenue separate from discounts.

For example, if this setting was toggled on the Actual Revenue for a Revenue of $10,000 with a discount of 10% would appear as $9,000. With this setting toggled off, the Actual Revenue would appear as $10,000, and the discount would appear separately.
Include Discount in Invoicing
Toggle this setting on if you want to create invoiceable items for the Discount Items so that they can be included on an invoice as a negative amount. If this setting is toggled off, invoiceable items are not created, and the Discount Items are used for reporting purposes only.

This setting does not affect flat-rate Discount Schemes

Discounting and Recognized Revenue

In the Proposal dashboard, the Financials card and the Revenue Summary card handle Discounts differently.

The Financials card displays the gross values for Services and Expenses for each Element. Discounts are not included in these values.

The bar chart in the Revenue Summary card displays the Contract Revenue, and by default includes Services, Expenses, and any applied Discount. If a Services filter is applied to the Revenue Summary card, the two cards display the same values.

Setting up a Discount Scheme Model

Before you can create Discount Schemes, you must have the relevant Discount Scheme Models in place. These set the parameters for the schemes. Any discount schemes you set up under a Scheme Model uses these parameters to define its behavior.

To set up Discount Scheme Models, please have your Kimble System Administrator contact Kimble.

Scheme Models enable you to define:

The level to which the Discount Scheme applies:
Do you want to apply Discount Schemes using this model to a whole Account? To different Proposals? Or to specific Assignments only?
The conditions for the discount:
Do you want to apply the discount regardless of business generated from the client? Do you want to set thresholds they must reach before the discount applies? And do you want to apply the discount to their total spend, or only their spend above the threshold?
How you want to define a threshold:
Do you want to measure it by how much Revenue you have recognized from the client? Or by how much you have invoiced them?
How contributions towards the threshold are calculated:
Do you want to total the contributions across the whole life of the scheme? Recalculate them each period (e.g. reset the contributions to zero each month)? Or per Assignment?
When the discount is applied:
Do you want to apply the discount once at the end of the scheme? Each period (e.g. if the threshold has been reached in a month, you could apply the discount to that month only)? Or just to an individual Assignment?
The length of Calculation and Application Terms:
Do you want to recalculate or apply a discount yearly? Quarterly? Monthly?

Setting up Discount Schemes

A Discount Scheme defines how a discount is applied to an Account or Proposal. This includes the discount rate, thresholds (where required), and, for an Account-level scheme, the start and end dates.

Setting up a Flat-Rate Discount Scheme without a Threshold

A flat-rate Discount Scheme without a threshold applies the discount regardless of the amount of business the client purchases. The discount applies to all services the client purchases.

Setting up a Flat-Rate for an Account

A flat-rate Discount Scheme grants a discount without a threshold, meaning that the discount applies to the total spend, regardless of the amount of business you get from the client.

To set up a flat-rate Discount Scheme for an Account:

Navigate to the Account for which you want to set up a Discount Scheme.

In the Discount Schemes section, click New.
The Discount Scheme page appears.

If Discount Schemes are not visible on the Account page, please have your Kimble System Administrator add the Discount Schemes Related List onto the Account Page Layout or have them contact Kimble for further assistance.

Select the Scheme Model from the drop-down list.
This auto-populates the Discount Scheme Name and updates the available fields.
In the Discount Pct field, enter the discount percentage you are applying to the Account.
Enter the Start Date and the End Date.
These determine the period for which the Discount Scheme is applicable.
Click Save.

Setting up a Flat-Rate for a Proposal

To configure a flat-rate Discount Scheme for a Proposal:

Navigate to the Proposal for which you want to set up a Discount Scheme.
In the menu on the left-hand side, click Discount Scheme.
The Discount Scheme page appears.
Select the Scheme Model from the drop-down list.
This auto-populates the Discount Scheme field and updates the available fields.
If required, edit the Discount Scheme Name.
In the Discount Pct field, enter the discount percentage you are applying to the Proposal.
Click Save.

Overriding the discount at the Individual Assignment Level

To set up a flat-rate that allows for variance in individual Assignments, create a Discount Scheme as described in Setting up a Flat-Rate for a Proposal, ensuring that the Scheme Model you select is configured to allow discounting at the Assignment level. This enables you to set a default discount for the Proposal that can be overridden for certain Assignments.

To change the discount for an Assignment:

Navigate to the Proposal containing the Element for which you want to edit the Assignment.
From the burger menu on the appropriate Element, click Configure Element to display the Edit Delivery Element.
The Discount Scheme and percentage are indicated below the revenue fields.
Edit either the Discount Pct value to apply a different discount percentage for that Assignment’s Default Revenue Rate, or the Revenue Rate to manually set the rate being charged.
The Total Revenue and Margin (%) values also change to reflect the new discounted amount.
Click Save.

Setting up a Flat-Rate Discount Scheme with Thresholds

A flat-rate Discount Scheme with thresholds grants a discount when a client purchases a certain amount of services from you (measured in total Revenue, Invoiced Value, or Approved Usage, depending on the Scheme Model). Once this threshold has been reached, the discount is backdated to the whole Application Term.

If there are multiple thresholds, the discount linked to the highest threshold a client reaches is applied to the whole period. Any discount that has already been applied is subtracted from any subsequent discounts. This means that a client earning a 5% discount at the first threshold and a 10% discount at the second threshold does not receive a 15% discount when the second discount is retrospectively applied to earlier spend.

For example:

With a single-threshold flat-rate discount scheme applied monthly across a calendar year, a client who does not reach the threshold until mid-July is invoiced in full between January and June, and then the discount is applied from July onwards.

With a multi-threshold flat-rate discount scheme applied over the life of a Proposal, the highest threshold that the client reaches within the life of the Proposal sets the discount for the total spend within that Proposal.

Setting up a Flat Rate with a Threshold for an Account

To set up a flat-rate Discount Scheme for an Account:

Navigate to the Account for which you want to set up a Discount Scheme.
In the Discount Schemes section, click New Discount Scheme.
The Discount Scheme page appears.
Select the Scheme Model from the drop-down list.
This auto-populates the Discount Scheme Name and updates the available fields.
Enter the Start Date and the End Date.
These determine the period for which the Discount Scheme is applicable.
In the Discount Rates section, click New Discount Rate.
The New Discount Rate window appears.
In the Measure Lower field, enter the threshold that must be reached (e.g. the amount that the Account must spend) for the discount to apply.
The discount is applied after the threshold is passed meaning that the spend must be greater than the threshold.
In the Measure Upper field, enter the maximum value for this tier, e.g. the amount the Account can spend before the next tier is reached. (If this is the final tier, leave this field blank.)
In the Discount Pct field, enter the discount percentage you are applying to the Proposal.
Click Save to close the window and add the Discount Rate.
Click Save.

Setting up a Flat-Rate with a Threshold for a Proposal

To configure a flat-rate Discount Scheme for a Proposal:

Navigate to the Proposal for which you want to set up a Discount Scheme.
In the menu on the left-hand side, click Discount Scheme.
The Discount Scheme page appears.
Select the Scheme Model from the drop-down list.
This auto-populates the Discount Scheme field and updates the available fields.
In the Discount Rates section, click New Discount Rate.
The New Discount Rate window appears.
In the Measure Lower field, enter the threshold that must be reached (e.g. the amount that the Account must spend) for the discount to apply.
The discount is applied after the threshold is passed meaning that the spend must be greater than the threshold.
In the Measure Upper field, enter the maximum value for this tier, e.g. the amount the Account can spend before the next tier is reached. (If this is the final tier, leave this field blank.)
In the Discount Pct field, enter the discount percentage you are applying to the Proposal.
Click Save to close the window and add the Discount Rate.
Add additional discount tiers as required.
The Measure Lower value should be the same as the Measure Upper value for the preceding tier. The discount is applied after this value has been exceeded.
Click Save.

Setting up a Tiered-Rate Discount Scheme

A tiered-rate Discount Scheme uses thresholds to grant discounts when a client purchases a certain amount of services from you (measured in total Revenue, Invoiced Value, or Approved Usage, depending on the Scheme Model). Once a threshold has been reached, the discount linked to that threshold is applied to any spend above the threshold. If there are multiple thresholds, discounts are applied in tiers.

For example:

With a single-threshold tiered discount scheme, If the threshold is set at an Invoiced Value of $100,000, which earns a discount of 10%, then if the client purchases $120,000 of services during the life of the scheme, they will only pay $118,000, as the amount above $100,000 ($20,000) receives a 10% discount.

If this was a multi-threshold discount scheme, with an additional threshold of $115,000 giving a 15% discount, the client would pay the full amount for the first $100,000, 90% of the next $15,000, and 85% of the last $5,000, or $117,750.

Setting up a Tiered-Rate for an Account

To set up a tiered-rate Discount Scheme for an Account:

Navigate to the Account for which you want to set up a Discount Scheme.
In the Discount Schemes section, click New Discount Scheme.
The Discount Scheme page appears.
Select the Scheme Model from the drop-down list.
This auto-populates the Discount Scheme Name and updates the available fields.
Enter the Start Date and the End Date.
These determine the period for which the Discount Scheme is applicable.
In the Discount Rates section, click New Discount Rate.
The New Discount Rate window appears.
In the Measure Lower field, enter the threshold that must be reached (e.g. the amount that the Account must spend) for the discount to apply.
The discount is applied after the threshold is passed meaning that the spend must be greater than the threshold.
In the Measure Upper field, enter the maximum value for this tier, e.g. the amount the Account can spend before the next tier is reached. (If this is the final tier, leave this field blank.)
In the Discount Pct field, enter the discount percentage you are applying to the Proposal.
Click Save to close the window and add the Discount Rate.
Add additional discount tiers as required.
The Measure Lower value should be the same as the Measure Upper value for the preceding tier. The discount is applied after this value has been exceeded.
Click Save.

Setting up a Tiered-Rate for a Proposal

To set up a tiered-rate Discount Scheme for a Proposal:

Navigate to the Proposal for which you want to set up a Discount Scheme.
In the menu on the left-hand side, click Discount Scheme.
The Discount Scheme page appears.
Select the Scheme Model from the drop-down list.
This auto-populates the Discount Scheme field and updates the available fields.
In the Discount Rates section, click New Discount Rate.
The New Discount Rate window appears.
In the Measure Lower field, enter the threshold that must be reached (e.g. the Revenue that must be generated by the Proposal) for the discount to apply.
In the Measure Upper field, enter the maximum value for the tier, e.g. the maximum amount of Revenue that can be generated before the next tier is reached. (If this is the final tier, leave this field blank.)
In the Discount Pct field, enter the discount percentage you are applying to the Proposal.
Click Save to close the window and add the Discount Rate.
Add additional discount tiers as required.
The Measure Lower value should be the same as the Measure Upper value for the preceding tier.
Click Save.

Invoicing

If your Organization has been set up to include Discount Items in Invoices, then when you create an Invoice for a client, the Discount can be added as a negative amount in a separate row. This enables you to demonstrate to the client how it contributes to the Invoice total.

If your Organization is not set up this way, then the values included in the Invoice have already been discounted.

Discounts can be selected for inclusion on the Invoice in the same way as other Items:

Discounts are listed on the Invoice as a Credit and applied before any tax is calculated.

Summer 19 Discounting Enhancements Feature Guide.pdf
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