Sales discount - What is a discount?

A sales discount is a reduced price offered by a business on a product or service.

Learn how to include discounts on invoices

A sales discount, also commonly known as just a ‘discount’ provides customers of a business with a reduced rate on one or more of the products or services being offered.

Discounts can be applied to nearly any industry or business offering sales of a product or service. There are a wide variety of reasons to offer discounts and different ways to apply a discount in invoicing - we’ll take a look at the main ones below.

Why use a discount?

A discount can be a great way to encourage customers to purchase in the event that your competitors are offering a similar product or service at a higher price. It can also be an incentive for customers to pay faster, or support repeat business.

Different types of discounts

Arguably, all discounts are aimed at providing an incentive for customers to purchase the product/service, or to purchase more of it. The most common types of discounts for freelancers, sole traders, and small business owners are:

  • Early/cash payment discounts: a cash discount offers a reduced invoice total for early payment on an invoice (typically within 10 days), encouraging customers to pay fast

  • Loyalty discounts: a discount provided for regular, repeat customers as an incentive for continued business

  • Volume discounts: a discount provided to customers that order a specific or large quantity of a product

There are many more types of discounts and depending on your business, it’s important to choose one that suits your target customers as well as offers a discount amount that will not negatively impact your income.

Adding a discount to your invoices

With online invoicing software like SumUp Invoices, it’s easy to add an overall percentage discount to the subtotal.

When creating a new invoice, under the ‘Invoice Options’ section enter the percentage that you would like to offer as a discount. The system will automatically calculate the totals and VAT for you. 

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