Managing discount calculations

When applying a discount to an item on an invoice, you can choose between three different methods:

A discount code e.g. TENPC
A number e.g. £10
A percentage e.g. 10%

if you charge tax/VAT on the services you provide, you can manage how discounts are applied . You can choose to have a discount applied either:

Before tax/VAT is applied
After tax/VAT is applied

The 'After tax' option is disabled if you have either Square or Xero connected to your WriteUpp account. This is because both Square and Xero only use a before tax calculation when discounting an invoice, so invoices that contain after tax discounts are not supported in either the Square or Xero platforms. As such, if you have Square or Xero connected to your WriteUpp account, you will not be able to select 'After tax' when applying a discount to a line item, or within Settings -> Invoice.

To switch between these two options, go to Settings -> Invoice and select the desired discount calculation:

If you don't charge VAT/tax, you do not have to make any considerations to the way you apply discounts. The calculations will only differ if you do have a tax/VAT rate set.

In addition, the final cost due (taking into account price, discounts and tax/VAT) will only differ if you apply a discount as a value, e.g £10. If you apply a percentage discount, the costs will be exactly the same whether the 10% is applied before or after the tax/VAT is.

An example of the difference between the two calculations if you apply a numeric discount, is noted below.

In both of these examples:

Appointment price as defined in Settings -> Scheduling -> Appointment Types = £50
VAT rate applied = 20%
£10 discount applied

Applying a discount before tax is applied to the appointment price:

The £10 discount is applied to the price of the appointment, then tax is calculated on the discounted price.

Applying a discount after tax is applied to the appointment price:

Tax is applied to the price of the appointment, then the discount is applied to the tax inclusive price. The Ex. Tax and Tax amounts are then calculated in proportion to the tax rate applied.

Updated on: 02/08/2024

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