Applying Discount based on Payment Term

Payment terms are the conditions surrounding the payments that outline a discount if the terms are met. When you select a payment term offering a discount, you can apply that discount when paying the invoice.

If you have chosen a payment term with a discount for a sales order, that discount will be suggested when you go to pay the invoice for the order. You can then apply the discount, thus adjusting the total payment required

As an example, let’s say that you have applied the Payment Terms 5%15 Net 70 on the Sales Order. This implies that a 5% discount is available if payment is completed within 15 days, with the total amount due within 70 days of being invoiced. So, if you have placed an Order for $1000 and you are making the payment within the first 15 days, based on the Payment Term the Customer is eligible for a $50 discount (5% of $1000). This discount is applicable at the time of payment.

How does it work?

• Open the invoice and go to Options > Payment > Pay Invoice. This opens the "Invoice Payment Module".

  
• Click on the amount displayed under the "Discount" column to proceed. This will direct you to the "Add Discount" section, enabling you to apply the discount.

  
• Here, you can view the ‘Payment Terms’ that you have applied, and the applicable discount based on the payment term under the "Suggested Discounts" column.

  
• Click on ‘Apply Discount’ to apply the discount. Optionally, adjust the discount value by modifying the Discount Amount field to either increase or decrease the discount as desired.