Give a discount

A discount lowers the price you charge, so it comes off before tax and the tax is worked out on the discounted amount. You can give one on a single line, on the whole document, or both, on quotations, invoices, credit notes and recurring invoices. How lines and tax add up is on Products and line items.

Before you start

• You need Edit on the document: Quote for a quotation, Invoice for an invoice, Credit Note for a credit note.
• The document must still be editable: a Draft invoice or credit note, or a quotation that is a Draft, or Open with no issued invoice raised from it. An issued invoice’s lines are locked.
• Decide whether the discount is a percentage or an amount. An amount on a line is off the whole line, not off each unit.

Steps

1. Open the document and select Edit. On a new document you are already editing.
2. For a line discount, tick Line discounts above the lines. A Discount column appears.
3. On the line, choose % or the currency, and type the discount, such as 10.
4. For a discount on the whole document, go to the totals. In the Discount row choose % or the currency, and type the discount.
5. Check Subtotal, Discount, the tax and Total, then save the document.

What happens next

Each discounted line shows its discount in the Discount column, and its amount is the line after the discount. Subtotal adds up the lines after their own discounts; the Discount row, such as Discount (5%), takes the document discount off it; the tax is worked out on what is left; and Total adds the tax.

On the PDF, a discounted line prints Less 10% discount and the amount under its description, or Less discount and the amount, and the document discount prints as its own row under the subtotal. Converting a quotation to an invoice, copying, revising, invoicing delivery orders and raising recurring invoices all carry the discounts with them.

Rules to know

• A percentage is more than 0 and at most 100, with up to two decimals. A percentage discount is rounded to the cent, half up.
• An amount has no more decimals than the currency has. A line discount cannot be more than the line (The discount is more than this line comes to.), and a document discount cannot be more than the subtotal (The discount is more than the subtotal.). A discount may bring a line to zero.
• Only a line worth more than zero can be discounted. A line with a negative price is a reduction already.
• When the lines have different tax rates, the document discount is shared across the rates in proportion to each rate’s lines, to the cent, so each rate is taxed on its own discounted amount.
• Line discounts stays ticked while any line has a discount; clear the discount on every line to turn it off.
• When a quotation is invoiced in parts, a percentage document discount applies to each invoice. An amount is shared in proportion to what each invoice bills, and the last invoice takes what is left. Percentages worked out on several invoices can differ by a cent from one invoice for the whole job.
• On an invoice that deducts a deposit, the document discount prints as an amount.
• Margin approval reads the price after every discount; see Document approval.
• A Word design your company uploaded prints the document discount only where it has the {{Totals.Discount}} field; the standard designs have it.
• Purchase orders and delivery orders have no discounts.

Why it works this way

A discount is a lower price, so it is taxed as one. A discount given when you sell lowers the value of the supply, so GST and other sales taxes are charged on the discounted price. Taking it off before tax keeps the tax on your invoice right.

The customer sees what they saved. Printing the full price, the discount and the net shows the customer the deal you gave, instead of a lower price they cannot compare.

Mixed rates share the discount. A tax invoice must state the tax for each rate. Sharing a document discount across the rates keeps each rate’s tax right, and the shares always add up to the discount you typed.

Work faster

• Use a percentage for a whole job. A document discount of 5% keeps the same share however you invoice the job — see Convert to an invoice.
• Revise rather than retype. When a customer asks for a better price, revise the quotation and change the discount — see Revise a quotation.
• Check your margin first. Type the line Cost to see the margin after the discount — see Line items.
• Set it once for a recurring bill. A discount on a recurring invoice is on every invoice it raises — see Set up a recurring invoice.

Examples

A line discount and a document discount. Mei Tan quotes Kelvin Ong at GST 9%:

Item	Qty	Unit price	Discount	Amount
Feature wall design	1	1,200.00		1,200.00
Wallpaper	12	85.00	10%	918.00
Installation	2	450.00		900.00

The wallpaper comes to 1,020.00; 10% of it is 102.00, so the line is 918.00. Subtotal is SGD 3,018.00. Mei adds a 5% loyalty discount in the Discount row: SGD 150.90, which leaves SGD 2,867.10. GST is SGD 258.04 and Total SGD 3,125.14.

Two tax rates. Harbour Café’s quotation has café design of SGD 3,000.00 at GST 9% and 20 rattan chairs of SGD 4,200.00 at GST 0%: Subtotal SGD 7,200.00. Mei gives SGD 720.00 off the whole quotation. It is shared in proportion: SGD 300.00 against the design and SGD 420.00 against the chairs. GST is 9% of SGD 2,700.00, SGD 243.00, and Total is SGD 6,723.00. Without the discount the GST would have been SGD 270.00.

Invoicing in two halves. A quotation of SGD 10,000.00 has a document discount of SGD 1,000.00. Mei raises a 50% progress invoice: it bills SGD 5,000.00 of lines with SGD 500.00 discount. The final invoice takes the remaining SGD 500.00.

Common questions

• Is a discount taken off before or after GST? Before. The tax is worked out on the price after the discount.
• Can I give a discount on one line only? Yes. Tick Line discounts and type it on that line.
• Can I use a percentage and an amount on the same document? Yes. Each line and the document each take one discount, either a percentage or an amount.
• Does the customer see the discount on the PDF? Yes. A discounted line prints its discount under the description, and a document discount prints as its own row.
• Can I still use a negative line for a discount? Yes. A line with a negative Unit price still works; the discount fields show the saving more clearly.
• Does a discount carry to the invoice? Yes. Converting a quotation, in full or in parts, carries its discounts.
• Can I discount a purchase order? No. Discounts are on quotations, invoices, credit notes and recurring invoices.
• Why is the discount refused? It is more than the line or the subtotal, the percentage is over 100, or the amount has more decimals than the currency.

Related

• Line items
• Tax calculation and rounding
• Convert to an invoice
• Create a credit note