2 Ways to Enter Customer Discounts in QBO

Hello. Today we're going to talk about how to add a discount in an invoice in QuickBooks Online. There are two ways to do this and I am going to show you how to use both ways and which one I prefer. So stay tuned.

So we will go to the gear on the top, right, which is where all your settings are. I always encourage people to look at this because there's all kinds of things that you can change and modify and add. Over here, let's go to sales and under the sales form content you have a section or a field called discount. So let's just click on that and we can actually toggle that on. Make sure you save. Click on done. And now let's go back to our invoice.

And you will see that a little discount button appears where you can enter a percentage and QuickBooks will track it within your reports, which we will look at after. So let's just set up a simple invoice. It'll be to adversary company. Everything populates. The invoice date, the due date. Let's click on the product or service. We'll sell them an audio recording device.

Let's sell them five. I think that's a good number. So everything populates. And here let's say because they're buying five, we are going to give them a 10% discount.

So that automatically calculates on the subtotal, which is the amount before taxes and this also translates into the amount after taxes. Alternatively, we can just decide to give them $50 off. So under we can change this to discount value and enter $50 and QuickBooks will adjust everything on the invoice. So let us save this.

And then we're going to close it and see how it affects our reports. So let's go to reports.

Let's go to the profit and loss report.

And I'm interested in this month because we entered the invoice on December 2nd. So let's run report and you'll see here that QuickBooks has automatically created an account in your chart of accounts called discounts given and we entered $50. So here you can track all of the discounts that you have given to your customers. Go back to the report summary and this is your picture for December. Now let's look at the second way to enter a discount so we can actually pull up the same invoice that we were just looking at. I like to go to the search menu over here.

And you'll see that the most recent transactions appear. This is a really handy tool. So let's Click on that.

And here we are just going to make this zero for now and let's give the customer a similar discount of $50. But we are just going to record it separately. So the way to do this is to create a new product or service which you can then use along with a description which can be a little more powerful. When you're creating an invoice. You can say things like preferred customer discount or you could provide a reason that resonates with the customer and makes them appreciate the discount a little more. So here we'll see. We don't really have a discount product or service. We're going to add new one directly here. This is a service we'll get. We're going to call this discounts. You can be and you can add as many of these as you want. So you can be more specific if you want to track different kinds of discounts separately. So let's just put call this discounts. So now the only other thing you really have to enter is the income account and you want to select discounts given which is that QuickBooks Online automated account. Alternatively, if this account does not appear, you can simply add new by going here, going to income, going to discounts and creating something called discounts or refunds given or simply discounts, whatever you prefer.

You can.

Select.

The sales tax that will apply or you can leave this blank and select the sales tax on the invoice directly. That is what I'm going to do because I charge different sales tax amounts to different customers in different provinces. So let's save and close this.

Now here I can say.

Because you are a great client and you perhaps you might not want to say that if you know you want to have a super professional invoice. But it's just again useful to have a description there to provide a reason as to why you're giving the client a discount and also so that they might know that it's a one time thing or it applies to certain quantity. Be as descriptive as possible because you want to set the expectation. If this is not an ongoing discount, then you don't want to be including this discount on every invoice or have them expect that. So let's put $50 now because this is a discount. It's very important to put a minus in front of this because.

Rather than deducting from the invoice, it will add to the invoice. You'll see with a plus it goes to 675. So we definitely want to make sure that it's a minus check the subtotal of your invoice, make sure everything else looks good and then you can save and close this.

And you'll find on the discounts given it's there and you now have a slightly better memo and this will also appear on the invoice that you send to the client. So if it isn't obvious, my preferred method is the second one because you can provide this detail and every bit of communication with your client I think is important.

I hope this was helpful. If you have any comments, please don't hesitate to leave them. If you have any ideas for new videos, you can absolutely leave them in the comments section. And please like and subscribe as this will encourage me to make more videos. Have a great day.