Articles on: Invoicing & Payment

Managing discount calculations

When applying a discount to an item on an invoice, you can choose between 3 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

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

If you don't charge VAT/tax, you don't 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.

XERO USERS: As Xero uses a before tax calculation when discounting an invoice, you SHOULD NOT use the After Tax calculation. As such, if you have Xero connected to your WriteUpp account, the After tax calculation option will be disabled. You won’t be able to select it when applying a discount to a line item, or within Settings -> Invoice.

Updated on: 08/02/2023

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