FAQ: Discounts & Taxes on Invoices

Can I apply both a line discount and a document-level discount on the same invoice?

Yes. Both discounts are applied in sequence: first, line discounts reduce individual item prices; then, the document-level discount is applied to the overall subtotal. For example, if an item with a 10% line discount subtotals to 100, and the invoice has a 5% document discount, the final contribution is 100 × 0.90 × 0.95 = 85.50.

How are taxes calculated when discounts are present?

Taxes are always calculated on the discounted amount. If an item's price is 100, a 10% line discount reduces it to 90, and tax is calculated on 90 (not the original 100). The same applies to document-level discounts.

What is a discount template?

A discount template is a saved discount configuration (name, amount, type, and optional GL account) that your administrator sets up in Settings → Discount Templates. You can reuse templates across invoices to avoid re-entering the same discount details. Ask your administrator to create templates for discounts you use regularly.

Can I use both a tax rate and a discount on the same item?

Yes. Both apply independently. The discount is subtracted first (reducing the item price), and then the tax is calculated on the reduced price.

What if I apply a negative discount?

A negative discount works as a surcharge or price increase. For example, -10% on a 100-unit price adds 10 units, bringing the total to 110. This is useful for administrative fees or special charges.

Who can set up tax rates and discount templates?

Your system administrator manages both in Settings (Tax Rates and Discount Templates). Contact them to create or modify rates and templates. You only need to select them when creating invoices.

What accounts are affected when I apply a discount?

The impact depends on the discount type:

• Line discount: reduces the Sales Revenue account credit (the revenue is credited with the discounted amount, not the full price).
• Document discount: typically debits a discount expense or contra-revenue account (configured by your administrator).

Ask your administrator about the specific GL accounts used for discounts in your system.

Can I change the discount or tax after the invoice is submitted?

Once an invoice is submitted or confirmed, you usually cannot edit the discount or tax. Instead, you would create a credit note or refund to reverse the original invoice and issue a corrected one. Check your system's permissions and workflow to confirm what actions are allowed on submitted invoices.

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