Cash discounts and tax reduction¶

Cash discounts are reductions in the amount a customer must pay for goods or services offered as an incentive for paying their invoice promptly. These discounts are typically a percentage of the total invoice amount and are applied if the customer pays within a specified time. Cash discounts can help a company maintain a steady cash flow.

A tax reduction can also be applied depending on the country or region.

Configuratie¶

To grant cash discounts to customers, you must first verify the gain and loss accounts. Then, configure payment terms and add a cash discount by checking the Early Discount checkbox and filling in the discount percentage, discount days, and tax reduction fields.

Cash discount gain/loss accounts¶

With a cash discount, the amount you earn depends on whether the customer benefits from the cash discount or not. This inevitably leads to gains and losses, which are recorded on default accounts.

To modify these accounts, go to Accounting ‣ Configuration ‣ Settings, and, in the Default Accounts section, select the accounts you want to use for the Cash Discount Gain account and Cash Discount Loss account.

Betaalvoorwaarden¶

Cash discounts are defined on payment terms. Configure them to your liking by going to Accounting ‣ Configuration ‣ Payment Terms, and make sure to fill out the discount percentage, discount days, and tax reduction fields.

Tax reductions¶

Depending on the country or region, the base amount used to compute the tax can vary, which can lead to a tax reduction. Since tax reductions are set on individual payment terms, each term can use a specific tax reduction.

To configure how the tax reduction is applied, go to a payment term with the Early Discount checkbox enabled, and select one of the three following options:

• Altijd (op factuur)

  The tax is always reduced. The base amount used to compute the tax is the discounted amount, whether the customer benefits from the discount or not.

• Bij vroege betaling

  The tax is reduced only if the customer pays early. The base amount used to compute the tax is the same as the sale: if the customer benefits from the reduction, then the tax is reduced. This means that, depending on the customer, the tax amount can vary after the invoice is issued.

• Nooit

  The tax is never reduced. The base amount used to compute the tax is the full amount, whether the customer benefits from the discount or not.

Apply a cash discount to a customer invoice¶

On a customer invoice, apply a cash discount by selecting the payment terms you created. Odoo automatically computes the correct amounts, tax amounts, due dates, and accounting records.

Under the Journal Items tab, you can display the discount details by clicking on the “toggle” button and adding the Discount Date and Discount Amount columns.

The discount amount and due date are also displayed on the generated invoice report sent to the customer if the Show installment dates option is checked on the payment terms.

Payment reconciliation¶

When you record a payment or reconcile your bank transactions, Odoo takes the customer payment’s date into account to determine if the customer can benefit from the cash discount or not.