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.
AdminXero Team
(Admin, Xero)
shared this idea
Hi everyone, we thoroughly appreciate everyone’s interest and support for enabling the ability to apply a prompt payment discount to invoices.
We understand how a direct prompt payment discount feature would improve the efficiency and automate manual efforts currently involved for you all here, but would like to be transparent that this isn’t something we’ve been able to roadmap atm.
Right now, one way to indicate that your business accepts or will apply a discount for prompt payment would be to write this into the invoice payment terms. When acted on there are a few ways you could consider recording this in Xero, such as;
- Edit the invoice to apply a discount directly
- Edit the invoice to add a negative line that directly draws down the total amount of the invoice
- Apply a credit to the invoice for the portion of the discount
We'd recommend connecting with your Xero advisor on how they'd recommend recording this in your org.
Alternatively, there are connected invoicing apps that you can explore through our Xero App store.
We'll continue to track support through this idea, and our product teams will continue to consider this in future planning, so if there’s any updates we’ll share here. Thanks
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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?
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Emma Innes
commented
We offer our customers a settlement discount if they pay early and would need an easy way of allocating this when they pay without the need to keep raising a credit note for the discount. Can you offer anything for this
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Riaan Badenhorst
commented
Yes, Xero. Please add this as a feature. Sage and QB has this as standard on payment. It will take out the hasslein bank reconciliation
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Sandra Martin
commented
Good day, please advise if it is possible to do discount journals against customers? It seems that we still need to do credit notes against the customer?