VHA Accounting Solutions

In the realm of business transactions, discounts are a common strategy used to incentivise early payments and foster strong buyer-seller relationships. At VHA Accounting Solutions, we understand the importance of accurately recording these discounts to maintain clear financial records and ensure tax compliance. Today, we’re breaking down the nuances between up-front and settlement discounts and how they impact your accounting practices. 

Up-Front Discounts: Simplified Transactions 

Imagine you’re purchasing goods retailed at R1,000, and the seller offers you an up-front discount of R50. This straightforward discount is applied immediately, reducing the transaction value to R950. For both buyer and seller, this simplicity streamlines the recording process: 

  • Sellers report sales at the discounted rate of R950, affecting their taxable income and VAT output accordingly. 
  • Buyers record the purchase at R950, which then influences their cost of sales or expenses and input VAT claims. 

This method ensures transparency and ease of management for both parties involved. 

Settlement Discounts: Strategic Savings 

Settlement discounts, however, are conditional and offered if the buyer settles the payment by a specific date. Unlike up-front discounts, these are recorded differently: 

  • Sellers initially recognise the full sale amount (R1,000). If the buyer takes advantage of the discount, the seller records a discount expense and adjusts the debtor balance, reflecting a net sale of R950. This requires issuing a credit note for VAT purposes. 
  • Buyers also recognise the full purchase amount and, upon taking the discount, adjust their records to show the reduced cost. This adjustment affects their cost of sales or expenses and necessitates a VAT adjustment if the full VAT was previously claimed. 

Implications and Best Practices 

The approach to recording settlement discounts is cautious yet beneficial, ensuring accuracy in financial statements and tax reporting. It highlights the flexibility and strategic advantage of settlement discounts for managing cash flow and incentivising early payments. 

Understanding the differences between up-front and settlement discounts is crucial for accurate financial reporting and tax compliance. At VHA Accounting Solutions, we’re committed to guiding our clients through these complexities, ensuring your financial management is both efficient and compliant. Whether you’re a seller offering discounts or a buyer benefiting from them, it’s essential to recognise the impact on your financial statements and tax obligations. 

For personalised advice and accounting solutions that cater to your business needs, reach out to us. Let’s ensure your accounting practices are as efficient and effective as possible. 

Stay Informed, Stay Ahead 

For more insights and updates, follow VHA Accounting Solutions on LinkedIn and visit our website. Together, let’s navigate the complexities of accounting with confidence and clarity. 


Kashveer Mathura

Accounting Portfolio Manager

kashveer@vhaaccounting.com 078 882 9783

Adrian Surjoo

Quality Control Manager, SAICA


  • National Diploma in Cost and Management
  • Accounting
  • Advanced diploma in Accounting Sciences
  • Professional Accountant (S.A.)

Bongumusa Zondi


Bongumusa Zondi, a senior accountant, blends business advisory with expertise in financial reporting and taxation. With just under a decade of experience in accounting and taxation, his career journey began by obtaining a National Diploma in Cost and Management Accounting and an Advanced Diploma in Accounting Sciences at the Durban University of Technology and University of South Africa, respectively. This was followed by a Junior Bookkeeper position at City Printing Works (Pty) Ltd. He began his SAIPA articles at Dobeyn Accounting Soultions and currently leads a dynamic accounting team and manages a sizeable portfolio of clients at VHA Accounting Solutions where he also completed his SAIPA Articles. Apart from assisting clients update their books and stay compliant with relevant authorities, he is fully interested in adding value through business advisory. Helping clients solve their financial problems and provide guidance on potential growth opportunities is his biggest passion. He has been driven by philosophies of teamwork and collaboration.

Notable achievements include qualifying as a Professional Accountant (S.A.) through SAIPA. Beyond the numbers, he enjoys watching sports, tutoring grade 12 learners, playing the piano and listening to classical music composed by Wolfgang Amadeus Mozart and George Frideric Handel, adding a well-rounded dimension to his professional life.

bongumusa@vhaaccounting.com 082 359 4536

Karishma Bhola


The VHA Accounting Solutions team is excited to announce a new insurance service offering headed by Karishma Bhola. Karishma is an accredited financial advisor and has 18 years of experience in the finance industry and expertise in marketing/foreign exchange and business management. As a seasoned financial guru, she prides herself on delivering excellent client service every time.

Vidyanth Bhola

Director / CEO

Passionate about exceptional client service, Vidyanth Bhola serves a wide client base as an advisor and accountant.Vidyanth focuses on tax planning and estate and succession planning, which he approaches with enthusiasm for human relationships and a penchant for teamwork, to achieve outstanding results. In addition to being VHA Accounting Solutions Inc founder and as director of the Bhola group of companies, Vidyanth is involved on the board and advisory level with several non-profit organisations and other initiatives. Vidyanth obtained his BCom degree and H Tax Diploma from the University of South Africa after which he worked at Colenbrander Inc, as a Accounting Portfolio Manager. In 2018, Vidyanth found the accounting firm VHA Accounting Solutions Inc. Vidyanth is a family man and avid rugby fan. He enjoys learning about Aviation and flew a Boeing in the flight simulator in Dubai. Vidyanth also works on various charity organisations and is involved in various food drives. Vidyanth is a member of the South African Institute of Tax Professional (SAITA) and the Southern African Institute for Business Accountants (SAIBA).