Invoice - Prompt Payment / Settlement Discount
To apply a prompt payment discount/settlement discount to an Accounts Receivable invoice from the match items screen in the Bank Reconciliation.
Purpose: So users can offer early discounts to vendors/suppliers without needing to do manual credit notes or editing the invoices.

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kevin Burrows commented
Please instigate this feature, it is essential to our business.
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Thomas Unwin commented
Yes spot on Riaan - there's one issue i saw a couple of months ago which only had 2 votes at the time and was already "Under Review" with a Xero employee called Kelly having replied.
The issue was to "add more gender options". Not that i'm denigrating the specific request, but there were only 2 votes on it when i first saw it and it was already under review with a response!!
Meanwhile, as per my original comment below here - THIS issue which is pretty vital, speaks directly to Xero's "WHY"/ stated purpose of existing and that, when you add together with other postings for basically the same thing, has been viewed thousands of time with no review.
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Riaan Badenhorst commented
Yes, Alex with all these comments (and other features that should be considered standard), I do not know as well? Lessor voted request are adhered too. To be brutally honest, its just feels like Xero went from a real peoples company (what I loved from Xero) to a very commercialised, we do what we like business, same as Sage. Maybe money does change one?
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Alex Watt commented
Absolutely VITAL for our business. Not sure what to do without it to be honest.
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Michael Chou commented
Xero please can you implement this ASAP
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Riaan Badenhorst commented
This suggestion was requested already https://central.xero.com/s/question/0D51N00004GHabYSAT/can-you-apply-an-early-payment-discount-on-invoices-for-customers. It has over 3000 views and is closed now. Still being ignored by Xero. WOW!!. They forget that accountants and advisors has a strong influence on what their customers must use. Maybe 3 mil subscribers, mostly encouraged by advisors than advertising.
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Richard Fletcher commented
Has there been any movement on this idea, Transport and Main Roads Queensland have this in place for registration renewals. i,e. if paid before xx/month/year the price is $xx, if paid after then full invoiced price. if a gov't dept. has it it's not that revolutionary.
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Christa Boren commented
This feature would be so helpful but I won't hold my breath. It was first requested in 2013 and there are still people asking for it every month, I found this after looking at another thread on the same topic. I don't think that Xero will ever listen. Like so much with Xero it mainly works and then it doesn't.
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Sharon Bolderson commented
I've had a request from a client for this - it would be a helpful feature.
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Roy Brown commented
I have a new client who needs this option when trading with WH Smiths and Holland and Barrat
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Henrikus Roesch commented
Need to add early payment / settlement discount without having to issue a separate credit note for individual invoices.
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Cathy Newport commented
this is an important function and takes extra time to add a credit note.
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Lizelle Mostert commented
Our distributors get a discount per line item, and then some of them get an additional settlement discount. In Pastel the additional Settlement discount was shown underneath the Sub Total, just before VAT was added. I am in desperate need for this function to be added.
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Andries Husselman commented
Has there been any advances regarding settlement discount to a supplier? We have contracts with some of our suppliers and if we pay before the term date due for the specific invoice we are require to get a % discount on this payment..
I see that in the bank recon we can choose adjustments - bank fee and minor adjustment option...? can there not be a adjustment called settlement discount and this will populate or post to a setup discount account?
Please advise on this feature because a credit note is a very time and we would like to make use of a setup or something that will allow this to happen?
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Thomas Unwin commented
Hi Team,
I see here only 24 votes, however on another thread containing discussion on this topic there are nearly 3000 views. The question was posed in 2018 by Anthony Carter and that thread was closed.
Here is the link: https://central.xero.com/s/question/0D51N00004GHabYSAT/can-you-apply-an-early-payment-discount-on-invoices-for-customers
Is it possible that the importance of this feature is flying under the radar - the fact that 3000 views have happened on that other thread indiactes a strong interest in this feature being added.
At a time where cashflow is more important that ever for small businesses, it feels like here is a feature that Xero could work on that would genuinely help small businesses to incentivise their larger customers to pay sooner/ on time and help alleivate stress.
This blog on Xero describes Xero's "why" as "making life better for small businesses (https://www.xero.com/blog/2019/09/driven-by-purpose-the-customer-experience-journey/)
So I feel that in that vein, this feature should be bumped up because it is something that can directly impact cashflow for small business customers of Xero, therefore making life better for them.
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Jo Scott commented
I have the potential of 100+ traders taking advantage of Early Settlement discount . . an I really going to have to raise credit against each payment? Very very time consuming.
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Susan Reynoldson commented
Please do add an easy way to enter and apply an early pay discount. It is very time consuming to enter a credit note for each early pay discount taken.
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Lauren Hsu commented
Please do add an easy way to enter and apply an early pay discount. It is very time consuming to enter a credit note for each early pay discount taken.
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Kaye Mater commented
I cannot see an answer from Xero regarding this? Is it possible to apply early settlement discount to a customer invoice? If it isn't then Xero are behind Sage and Quickbooks
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Robert Jay commented
I`m a new user and we do offer settlement discount for prompt payment. It appears there may have previously been a link, cant seem to find it here. Can it be set up again so at least I can see a work around for the moment?