How to show a discount on an invoice: examples and tips | Enty
There are two types of people in this world: those who love a good discount and those who just don’t know how to use them. But don’t worry, you’re here to join the first group. If you’re offering discounts to your clients, you want them to know exactly how much they’re saving and why.
Now, how do you make sure your clients know they’re getting a sweet deal? If only you could send a thank-you card and an invoice in one, but until that innovation happens, you’ll have to rely on presenting your discounts clearly. Transparency isn’t just a nice-to-have feature—it’s essential. By the end of this guide, you’ll know exactly how to create invoices that showcase your discounts without a hitch.
Understanding the importance of displaying discounts on invoices
Offering discounts is a powerful way to attract and retain customers, but simply offering them isn’t enough—you need to showcase them clearly. Discounts are more than just a price reduction; they’re a strategic tool that can drive customer loyalty, improve client relationships, and streamline financial transparency. By visibly displaying discounts on invoices, businesses communicate value, professionalism, and trustworthiness. This not only ensures customers recognize the benefits they’re receiving but also reinforces your brand’s commitment to fairness and clarity. Whether you’re running seasonal promotions, rewarding loyal clients, or offering early payment incentives, documenting these savings helps both you and your clients stay on the same page financially.
Including discounts in your invoices isn’t just about transparency—it serves several key purposes:
Builds trust with customers: when clients see exactly how much they’re saving, it reinforces their belief in your honesty and professionalism.
Clear financial records: for both you and your customers, showing discounts ensures proper bookkeeping for tax and record-keeping purposes.
Encourages repeat business: people love seeing their savings. Making discounts clear can encourage customers to return for the next good deal.
If you’re not already adding discounts directly to your invoices, it might be time to start.
Types of discounts to include in your invoice
By clearly specifying discounts on your invoices, you not only showcase the savings but also maintain transparency and trust. Here are some common types of discounts to consider including:
Percentage discounts: ideal for sales promotions or bulk purchases. For example, if the original price is $100 and you apply a 10% discount, the discount amount will be -$10, making the total amount due $90.
Fixed-amount discounts: a flat dollar amount deducted from the total. For instance, if the original price is $250 and you offer a $20 discount, the total amount due will be $230.
Coupons or promo codes: perfect for tracking specific promotions like SAVE50 or WELCOME10. For example, if a customer uses the promo code WELCOME10, the discount might be -$50 on the total amount.
Seasonal discounts or deals: special offers tied to holidays or limited-time events. For example, you might offer a "Black Friday Discount" or a "Summer Sale" promotion.
Loyalty discounts: reward repeat customers for their continued support with exclusive savings. These discounts can encourage long-term relationships and repeat business.
By including these details, you make invoices more transparent and reinforce the value of your business relationship.
How to show a discount on an invoice
Now that we’ve identified key discount types, it’s time to add them to your invoices. Below are two common methods:
1. Line-item discounts
Apply discounts directly to individual line items within the invoice. This is ideal when only certain products or services are discounted.
Example layout
Service A: $100
Discount (10% off): -$10
Subtotal for Service A: $90
2. Subtotal discounts
Apply the discount to the total bill rather than one specific item. This is best used for percentage-based or fixed-amount discounts covering the entire invoice.
Example layout
Subtotal Before Discount: $200
Discount (10% off): -$20
Final Total Due: $180
Each method works well depending on the nature of the discount and your invoicing process. Choose whichever option makes the most sense for your business. Alternatively, you can use software - with Enty, you can easily manage and display discounts on your invoices, ensuring that both you and your clients have clarity on the final amount due. Enty’s customizable invoice templates allow you to set up specific discount types—be it percentage-based or fixed amount—without hassle. Integrate promotional codes and adjust details with just a few clicks, making the entire process smoother and more professional.
Step-by-step guide to adding discounts using invoicing software
If you’re working with digital invoicing software (and you should be!), here’s a simple step-by-step process to include discounts:
Step 1. Create a new invoice
Start by logging into your invoicing software (e.g.,Enty) and creating a new invoice for your client. Ensure all necessary details are included: your business name, contact information, your client’s details, and the invoice date. With Enty, you can pull up client profiles directly from calalogue, saving you time and reducing errors. Once the basic details are in place, you can move on to itemizing the products or services provided.
Step 2. Add your line items
This step involves listing out the specific products or services you're billing for. For each item, make sure the quantity, unit price, and total for that line are correct. If you’re working with complex products or services, be sure to include a detailed description to avoid confusion. Some invoicing platforms also let you group items under categories (e.g., “Design Services” or “Consulting Fees”), making your invoice even more organized and easier to read.
Step 3. Input the discount
Most invoicing platforms have a dedicated field for adding discounts. You can apply:
A percentage discount directly to a line item or subtotal (e.g., “10%”).
A fixed amount discount in dollars (e.g., “$20 off”).
If your software doesn’t include this functionality, you can manually enter your discount as a separate line item labeled “Discount -10%” or “Discount -$20."
Step 4. Check tax calculations
After applying the discount, you’ll need to verify that the tax calculations reflect the correct discounted amount. Many invoicing platforms will automatically adjust the tax based on the post-discount amount, but it’s always a good practice to double-check the numbers. With Enty, the VAT will be applied automatically. You want to ensure the total amount owed matches what you expect after the discount is applied.
Step 5. Add notes or promo code details
Step 6. Review and send
Before finalizing the invoice, always review the details carefully. Double-check the discount and ensure that the final total matches the agreed-upon price after the discount is applied. Many invoicing platforms allow you to preview the invoice as your client will see it, so you can catch any mistakes before sending it. Once everything looks good, send the invoice off to your client. If you're using digital invoicing software, you can often send invoices directly through email, and many platforms offer automated reminder features to ensure timely payments.
Best practices for presenting discounts
Here are a few key tips for presenting your discounts clearly and professionally.
Always use descriptive and specific labels for your discounts. Phrases like “Holiday Sale,” “Referral Discount,” or “Senior Citizen Discount” immediately tell the customer what the discount is for, making it clear why they're receiving the price reduction. This not only helps with clarity but also gives your clients a sense of value and reinforces the reason for the discount. Avoid vague terms like "Discount" without explanation, as this can confuse the customer or make the offer seem less legitimate.
Show your math
Transparency is key. Display the original price, the discount amount, and the final total on your invoice. This ensures that your client understands exactly how the discount was applied. For example, showing “Original Price: $200, Discount (10%): -$20, Total Due: $180” gives a clear breakdown of the math behind the savings. This approach not only builds trust but also helps prevent any misunderstandings or disputes down the line.
Provide context
Adding a brief note explaining the discount can go a long way, especially if the discount is part of a limited-time promotion or a one-time offer. For instance, if you're offering a discount as part of a holiday promotion, you might include a line like, “Enjoy our Holiday Sale – 15% off your total purchase until December 31st.” Providing context adds clarity and helps reinforce the urgency or special nature of the offer, encouraging your clients to take advantage of the deal before it expires.
Test your software
Different invoicing tools have varying capabilities when it comes to applying discounts. It’s important to test your invoicing software to ensure it calculates totals, taxes, and discounts correctly. Run a few mock invoices to see how the system handles percentage discounts, fixed amounts, and how taxes are recalculated after discounts are applied. This ensures there are no errors when creating invoices, and your clients receive accurate, professional invoices every time.
Keep it professional
While offering a discount is a great way to incentivize business, it’s important to maintain a professional appearance throughout the invoice. Ensure that your invoice template remains consistent with your brand’s design, with proper formatting, and that all relevant details (like payment terms and company information) are still visible. A clean, professional invoice will reflect well on your business and assure clients that the discount is legitimate and part of your standard services.
Common mistakes to avoid
While adding discounts to invoices is straightforward, there are still a few pitfalls to watch out for:
Hiding the discount: failing to list the discount clearly on the invoice can lead to confusion or disputes. Always make it visible!
Not adjusting sales tax properly: always check that taxes are calculated on the post-discount amount, not the original price.
Overcomplicating the layout: try to keep your invoices clean and easy to read. Too many unnecessary details can overwhelm the customer.
Forgetting expiration dates for coupons: make sure to note if a discount or promo code is time-sensitive.
Final thoughts
So, the next time you’re drafting an invoice with a discount, remember that it’s not just about the numbers—it’s about building trust, showing appreciation, and making your clients feel like they’re part of something special. By being transparent about discounts and showcasing them clearly on your invoices, you’re not just simplifying the process—you’re reinforcing your brand’s commitment to fairness and value. Whether you’re offering a percentage off, a fixed-amount discount, or a seasonal deal, taking the time to show your clients what they’re saving will pay off in long-term customer loyalty and satisfaction.
