FAQ: Discounts & Taxes on Sales Orders

Can I apply both a line discount and a document discount on the same order?

Yes. The line discount is applied first (reducing the price of that specific item), and then the document discount is applied to the order total (which includes the already-discounted line). Both are cumulative.

What is the difference between a percentage discount and a flat discount?

A percentage discount reduces the price by a percentage (e.g., 10% of 1,000 is 100 off). A flat discount reduces the price by a fixed amount (e.g., 500 off regardless of the order total). Check your system to see which format is supported.

Can I apply tax to the discount, or only to the original price?

Most systems apply tax to the final price after the discount. So if the order is 1,000 with a 10% discount (100 off), tax is applied to 900, not 1,000. However, check your local tax rules—some jurisdictions tax the original price.

Do taxes apply to the whole order or to individual lines?

Taxes typically apply to the entire order total (after discounts). Some systems allow different tax rates for different product types, in which case taxes are calculated per line and then summed.

What if I apply a discount that is too large and makes the order negative?

The system should not allow you to create a negative order total. If you try to save an order with a discount larger than the order total, you will get an error. Adjust the discount to be smaller.

Can I give a different discount to different customers?

Yes, you can apply different discounts to different customer orders as needed. However, if you want to enforce standard discounts (e.g., "all customers of type X get 10% off"), your administrator can set up discount templates to make this consistent.

What happens to the discount when I convert a sales order to an invoice?

The discount is preserved. When you convert the sales order to an invoice, the same discount amount (or percentage) is carried over, and the invoice total reflects the discounted amount.

Can I edit a discount after saving the order?

Yes. Open the order again, change the discount value, and save. The order total updates automatically.

Are there any restrictions on tax rates I can apply?

Your administrator sets up which tax rates are available in the system. You can only choose from the rates they have created. If you need a different rate, ask your administrator.

What if the customer is in a different tax jurisdiction (e.g., a different country)?

If your customer is in a different country, they may be subject to different tax rules. Some systems can automatically apply the correct tax based on the customer's location. If not, you may need to manually select the correct tax rate or mark the order as tax-exempt if applicable.