About Discounts

Discounts

To encourage prompt payments from customers, your business may choose to offer discount terms (i.e., the invoice amount is reduced by X percent if paid within Y days). The most common discount term is a 2% discount if full payment is received within 10 days of the invoice date (e.g., 2/10 Net 30). The date used to determine an invoice's discount eligibility is the date of the deposit in which the payment is received.

An invoice is eligible for a discount if:

• The payment term specifies a discount, and
• The payment date is within the discount period, and
• The payment amount is within discount percentage

Discounts are optional. If applicable, they are included in the Applied Payments event in Account Details.

Optional variances

Beyond the discount itself, you have the option to allow flexibility in granting discounts by setting up variances. While these optional variances are not announced to customers, they enable the system to resolve "gray areas" where the payment processor may wonder what to do. These variances apply to ALL customers with discount terms. You cannot specify a variance for a single customer.

• Discount date extension – You can elect to extend an invoice's discount eligibility for a number of days beyond the expiration date specified by the discount term. For example, if the discount period expires on June 5 and your business allows a three-day extension, a customer can still use the discount through June 8. (The extension days are full calendar days, including weekends and holidays.) Note: The Prox with Discount payment term uses a discount day of month rather than a number of days.
• Shortpay dollar allowance – To account for small differences in rounding, you can elect to allow a customer to pay up to $X.xx less than the discounted invoice amount as full payment. For example, if an invoice's term allows a $10 discount and your business's shortpay dollar allowance is $5, the customer can shortpay the invoice by $15 ($10 discount plus $5 allowance).

Prox with Discount

If...	Then...	Example
Invoices are not yet billed	Prox invoices are eligible for any applicable discount.	Prox 10th B 5% 1st If the invoice has not yet been billed, it is eligible for a discount.
If Day of Month Due is equal to or beyond the Discount Day of Month Due	Prox invoice is eligible for a discount up to and including the discount date during the month the invoice is due.	Prox 15th B 2% 10th Invoice is due on November 15. It is eligible for a discount up to and including November 10.
If Day of Month Due is earlier than Discount Day of Month Due	Prox invoice is eligible for a discount up to and including the discount date in the month prior to the invoice being due.	Prox 15th B 2% 28th Invoice is due on November 15. It is eligible for a discount up to and including October 28.

Prox with Discount Variances

Variance	Example
Extend the discount eligibility for Prox invoices by the number of days defined in the Discount Date Extension Variance for the business.	Prox 10th B 5% 1st Discount Date Extension Variance = 5 Days The discount applies up to and including the 6th day of the month.
Apply the defined Short Pay Dollar Allowance to discount-eligible invoices with Prox terms.	$100 invoice with a term of Prox 10th B 5% 1st Short Pay Dollar Allowance = $5.00 The discount applies when credits of $90 or more are applied to the invoice.

Common questions

Can you grant or deny a discount while applying credit?

The system calculates discount eligibility based on the payment term and your business setup.

• To change your business profile for future transactions, contact your financial institution.
• To allow a discount on a specific invoice, go to New Transaction, add a credit memo, and apply it to the invoice.