Debitoor's accounting dictionary
Sales discount

Sales discount - What is a discount?

A sales discount is a reduced price offered by a business on a product or service

Add overall discounts or in-line discounts to individual products or services with a click in Debitoor invoicing software. Try it free for 7 days.

A sales discount, also commonly known as just a ‘discount’ provides customers of a business with a reduced rate on one or more of the products or services being offered.

Discounts can be applied to nearly any industry or business offering sales of a product or service. There are a wide variety of reasons to offer discounts and different ways to apply a discount in invoicing - we’ll take a look at the main ones below.

Why use a discount?

A discount can be a great way to encourage customers to purchase in the event that your competitors are offering a similar product or service at a higher price, or can be an incentive for them to pay faster, or support repeat business.

Different types of discounts

There are a large number of different reasons to provide a discount. Arguably, all discounts are aimed at providing an incentive for customers to purchase the product/service, or to purchase more of it. The most common types of discounts for freelancers, sole traders, and small business owners are generally:

  • Early/cash payment discounts: a discount for early or cash payment on an invoice (typically within 10 days), encouraging customers to pay fast
  • Loyalty discounts: a discount provided for regular, repeat customers as an incentive for continued business
  • Volume discounts: a discount provided to customers that order a specific or large quantity of a product

There are many more types of discounts and depending on your business, it’s important to choose one that suits your target customers as well as a percentage or amount discount that will not negatively impact on your income.

Adding a discount in your invoicing software

With online invoicing software like Debitoor, it’s easy to add a discount either by line (a particular product or service) or to provide an overall percentage discount to the subtotal.

When creating a new invoice, an in-line discount can be added with a click from a dropdown menu at the right of each invoice line. Alternatively, the overall discount percentage can be added in the ‘Options’ section below the invoice lines. The calculations are automatic and clearly indicated on your invoices.

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