How To Fix WS504 - In company code &1, the cash discount amount contains tax

SAP Error Message - Details

• Message type: E = Error

• Message class: WS - Supplier Billing Document

• Message number: 504

• Message text: In company code &1, the cash discount amount contains tax

What causes this issue?

In company code &v1&, the cash discount is calculated on the gross
amount. This distorts the results of profit simulation.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Procedure for System Administrators

Cash discount conditions are not taken into account in profit
simulation if you remove the "Calculate cash discount" indicator in
Customizing for the profit group.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message WS504 - In company code &1, the cash discount amount contains tax ?

  SAP Error Message:
  
  WS504 - "In company code &1, the cash discount amount contains tax"
  
  Cause:
  This error occurs during invoice verification or posting when the system detects that the cash discount amount entered includes tax. According to SAP's standard logic, the cash discount amount should be net of tax. The system expects the cash discount to be calculated on the net amount (amount before tax), not on the gross amount (amount including tax).
  In other words, the cash discount amount you entered or calculated contains tax, which is not allowed because the cash discount is supposed to reduce the taxable base, not the tax itself.
  
  When does it occur?
  
  During invoice verification (transaction MIRO) or vendor invoice posting.
  When the cash discount amount is manually entered or automatically calculated incorrectly.
  When tax configuration or calculation procedure causes the cash discount to be considered as including tax.
  
  
  Solution:
  
  
  Check the Cash Discount Amount:
  
  Ensure that the cash discount amount entered or calculated is net of tax.
  If you enter the cash discount manually, enter the amount excluding tax.
  
  
  
  Review Tax and Cash Discount Configuration:
  
  Verify the tax codes and tax calculation procedure in the company code.
  Check if the tax condition types and cash discount condition types are correctly configured.
  Make sure that the cash discount condition type is set up to calculate on the net amount.
  
  
  
  Adjust the Invoice or Payment Terms:
  
  Review the payment terms and cash discount terms in the vendor master or purchase order.
  Ensure that the cash discount percentage and base amount are correctly defined.
  
  
  
  Check for Custom Enhancements or User Exits:
  
  If there are any customizations or user exits influencing the cash discount or tax calculation, verify that they do not cause the cash discount to include tax.
  
  
  
  Recalculate the Invoice:
  
  If the error occurs during MIRO, try recalculating the invoice or re-entering the cash discount amount correctly.
  
  
  
  
  Related Information:
  
  Transaction Codes: MIRO (Invoice Verification), FB60 (Vendor Invoice), F-43 (Enter Vendor Invoice)
  Tables: BKPF (Accounting Document Header), BSEG (Accounting Document Segment), KONV (Conditions)
  SAP Notes: Search for SAP Notes related to WS504 for any patches or updates.
  Configuration Paths:
  
  IMG ? Financial Accounting ? Accounts Receivable and Accounts Payable ? Vendor Accounts ? Master Data ? Define Payment Terms
  IMG ? Financial Accounting ? Financial Accounting Global Settings ? Tax on Sales/Purchases ? Basic Settings ? Check Calculation Procedure
  
  
  
  
  Summary:
  The WS504 error indicates that the cash discount amount includes tax, which is not allowed. The cash discount must be calculated on the net amount excluding tax. Correct the cash discount amount, review tax and payment term configurations, and ensure proper calculation procedures to resolve this error.