A discount is when you give a client a price that’s lower than the normal price of the product or service. There are many reasons why you’d want to do this.
A discount is a reduction in the price of a product or service, usually expressed as a percentage. If you usually sell candles for $5 per candle, but then give a client a 50 percent discount, they’d have to pay $2.50 per candle.
Why give a client a discount?
There are many reasons to offer a reduced price, let’s go through some common ones. You can give a discount
- to encourage repeat purchases. If you send a product in the mail, you can for example include a brochure with a sales code in the package.
- to land a large project, which will earn you a stable income going forward.
- to clients who refer other clients, as an incentive to spread the word about your business.
- if clients have previously been unhappy with your product or service, or with the customer service they’ve received.
Make sure you don’t sell products or services for less than their cost price—what it costs to produce or deliver them—unless there are long-term benefits to winning over a client. If you consistently sell products or services below the cost price, you’ll end up operating at a loss.
How to add it to the invoice
Once you’ve decided how much of a discount to give, you have to ensure that you add it to the invoice. Have you created an invoice without the discount? You’ll first have to credit the invoice and then create a new invoice with the correct discount.
If you use invoicing software, you can just enter the percentage when you add the product or service. The discount will be worked out for you, and automatically deducted from the price.
