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Dear Xero Product Team,

I would like to submit a feature request that I believe would provide significant value to businesses using Xero Accounts Payable, particularly wholesalers, retailers and companies that regularly receive supplier settlement discounts for early payment.

Currently, when paying supplier bills through Batch Payments, there is no built-in functionality to process settlement discounts. Users are required to manually reduce the payment amount and then create separate supplier credit notes to clear the outstanding balance. This process is time-consuming, creates additional administrative work, and can lead to inconsistencies in VAT treatment and reporting.

Recently, while processing supplier payments in our business, we had to manually reduce payment amounts, create separate supplier credit notes, allocate those credit notes against the invoices, and create a dedicated reporting account simply to track settlement discounts received. While this works, it is unnecessarily cumbersome for what is a common accounts payable function.

I would like to suggest the following enhancements:

1. Settlement Discount Column in Batch Payments

Add a "Settlement Discount" column directly within the Batch Payment screen.

This would allow users to:

- Enter either a discount percentage or discount value against each invoice.
- Automatically calculate the final payment amount.
- Automatically clear the invoice balance.
- Automatically post the discount to a designated settlement discount account.

2. Supplier Discount Terms

Add discount terms to the supplier/contact setup screen, allowing businesses to capture information such as:

- 2.5% discount if paid within 30 days.
- 1.5% discount if paid within 14 days.
- Custom settlement discount structures.

When selecting invoices for payment, Xero could automatically calculate and suggest the applicable discount.

3. Discount Visibility in Bills to Pay

Add additional columns and sorting options within the Bills to Pay screen, including:

- Discount Date.
- Discount Available.
- Settlement Discount %.
- Estimated Saving.

Users should be able to sort and filter by Discount Date in the same way they can sort by Due Date.

This functionality exists in other accounting systems and allows businesses to prioritise payments to maximise savings.

4. Automatic Remittance Advice Integration

When a settlement discount is applied, remittance advices should automatically display:

- Original invoice amount.
- Settlement discount applied.
- Net amount paid.
- Remaining balance (if any).

This would improve transparency and reduce supplier queries.

5. Automatic Accounting Treatment

When a discount is applied during payment, Xero should automatically:

- Close the supplier invoice.
- Create the required accounting entry.
- Post the discount to a nominated account.
- Apply the correct VAT treatment based on the original supplier bill.

This would eliminate the need for separate supplier credit notes and reduce the risk of inconsistent VAT treatment.

6. User-Defined Discount Accounts

Allow businesses to nominate a default account such as:

- Settlement Discounts Received.
- Purchase Discounts.
- Early Payment Discounts.

All settlement discounts could then be posted consistently without manual account selection.

7. Settlement Discount Reporting

Add dedicated reporting functionality including:

- Discounts received by supplier.
- Discounts received by month.
- Discounts received by financial year.
- Savings achieved through early payment.

This would allow businesses to measure supplier performance and quantify the benefits of settlement discount programmes.

Comparison to Existing Accounting Systems

QuickBooks Desktop includes settlement discount functionality directly within the Pay Bills screen, allowing users to:

- View discount dates.
- Sort by discount eligibility.
- Capture discounts during payment.
- Automatically clear invoice balances.

A similar workflow within Xero would significantly improve efficiency, reduce administration, improve VAT accuracy and provide a better user experience for businesses that regularly utilise supplier settlement discounts.

Business Benefits

The proposed functionality would:

- Reduce administration time.
- Eliminate manual credit note creation.
- Improve accounts payable efficiency.
- Improve VAT consistency.
- Enhance supplier payment workflows.
- Improve reporting accuracy.
- Increase visibility of savings achieved through early payment.

I believe this enhancement would benefit a large number of Xero users globally and would be a valuable addition to the Accounts Payable module.

Thank you for your consideration, and I look forward to seeing this functionality considered for future development.

I have also seen that similar requests have been pending for almost 2 years

Kind regards,

Shuaib Moolla
CHICANOS

we own an incorporated society which relies on sponsorship regularly for our events. These sponsors usually give us discounts be it $s or %. it would be great to have this as a column rather than a row as it can vary. if it could be next to tax rate and the algorithm could be set up to understand the difference between % and $ so that each item can be filled separately for whichever it needs. At the moment I'm writing incl 10% (eg) discount. in the description and deduct it as amount. I'm not having a multiplied decimal as this will add confusion for our suppliers/sponsors and we don't want to lose them. We'd also like it to be user friendly for us who are already putting far to much effort into having to use valuable time to learn new and unwanted skills

When entering the bills, I would be great that the price that appears is the last one, and that we can add the discount on the bill without creating a purchase order.

I have to manually do a credit note, to apply a discount, for over 50 suppliers every week, having this feature would save so much time. I am just glad that I don't apply the discount to every bill, there are hundreds of supplier invoices every week.
Please xero, it is just a tick box like in the invoice area.

This needs to be a priority

This has been requested for so long. And it is a total no brainer. This is software used by small and medium businesses. If XERO management had any idea of the needs that we have they would have fixed this a long time ago.
Every month when I pay my monthly supplier accounts I grit my teeth over not having this functionality. And I know other small businesses that feel the same. I also know some businesses that did not proceed with purchasing Xero because of the abscence of this feature.

This has been requested for so long. And it is a total no brainer. This is software used by small and medium businesses. If XERO management had any idea of the needs that we have they would have fixed this a long time ago.
Every month when I pay my monthly supplier accounts I grit my teeth over not having this functionality. And I know other small businesses that feel the same. I also know some businesses that did not proceed with purchasing Xero because of the abscence of this feature.

In the projects area, the expenses area lists expenses at their original cost and doesn't include the discount given by that supplier. This means the expenses shown for the project aren't actually reflective of the true cost of the project.
There are currently no reports that allow you to see the company expenses, with discount, filtered by project so i can't actually report on the GP and net profit of a project without the painstaking process of clicking into every expense to find out the ACTUAL cost to the company less the discount given. We have suppliers who give up to a 50-60% discount so this is critical.

Please can you add this feature. Thank you

Implementing an early settlement discount feature would be a significant improvement for our company. Most of our suppliers offer these discounts, so the ability to post a discount with each invoice—subject to a specific payment date—would be ideal.

Specifically, we are looking for a system that automatically applies the discount to invoices paid within the qualifying window during bulk payments, while defaulting to the full invoice amount for those that fall outside that timeframe.

This functionality would greatly enhance our efficiency. Could you please let me know if this is something that can be supported?

Super frustrating that this was suggested 13 years ago and it hasn't been improved in that time. I'm wasting so much time adding a discount line to nearly 100 bills a week.

Very frustrating. This has been dragging on for years.

Hi, thank you for your reply, total understand. Please if you guys can push it up to the front of the quey. It is quite time consuming, to have to go do a credit note each time for the discount on a suppliers, one suggestion is that when we were doing the payment in the bank recon, we could apply the discount there as well. which is quite nice too. This is the only feature that i have found missing in Xero, otherwise all is good so far. Shirene

I have discounts on my PO and then when it pushes to a bill it does not show the discount but it pushes to the bill and then does not show. But the unit price and amount have the discount.

Hi, please if you can we really need discount applied to accounts payable, as we have alot of suppliers that offer discount to us. I would be so nice to be able to do it on bills level and not have to capture credit notes each time. It can be time consuming. Please this is one feature that is missing from Xero, I am a new user to Xero we use to use pastel, they had that feature. We are really missing it. Thanks

This is a standard feature in most other software. Not sure why Xero cannot handle early pay discounts.

HI,

I RECEIVED A BILL FROM CREDITOR WITH DISCOUNT AND DONT KNOW HOW TO ADD THE BILL TO XERO SO THAT THE AMOUNTS MATCH.

Whilst I continue to use Xero I do not recommend it to others. In fact I disrecommend it. Customer focus and response is very poor. This particular topic has dragged on for years. The lack of action by Xero show how out of touch their senior management is from customers of their in the field.

Just asked the same question today. I have an statement with multiple lines getting discounts, so now I'll have to amend each one individually. What a pain.

Very disappointing response. Same old same old. Clearly Xero doesn't care about existing customers. - John Rae

I also have several suppliers that offer a discount, but currently have to manually calculate each invoice. I would also like to see a credit limit and discount % section within the supplier details. They are there for AR but not AP