Hello there! 👋 Are you a Belgian self-employed person searching for information on how to manage commercial discounts on your invoices? Then you’ve come to the right place! In this blog post, we will discuss everything you need to know about commercial discounts and how they can affect your billing and vAT.
What is a commercial discount? 🔎
A commercial discount is a reduction in the selling price of a product or services that you grant as a merchant. It can be applied to the gross amount of the invoice and can apply to one product or the entire invoice. The purpose of a commercial discount can vary, but it is often used as a marketing tool to attract customers or to reward existing customers for their loyalty.
How do you process a commercial discount on your invoices? 📃
Processing a commercial discount on your invoices is quite simple. You can apply it as a percentage on the total amount or per invoice item. For example, if you want to apply a 10% discount to a €100 invoice, you simply apply the discount percentage to the total amount and end up with a new invoice amount of €90.
If you want to set a discount per invoice item, simply add a new line under the invoice item with the calculated discount.
Did you know?
Through Dexxter you can easily switch between discount types, either a fixed price or percentage on the total amount or invoice item is possible!
Commercial discount versus financial/cash discount
It is important to know that a commercial discount is not the same as a discount for cash payments. A cash discount is given if you pay the invoice within a certain term. Unlike a commercial discount, a cash payment discount is given only if you actually pay within the specified term. If you pay late, the cash payment discount is forfeited.
Effect of commercial discount on vAT 🏷️
An important aspect to consider when managing commercial discounts is how they affect vAT. Basically, VAT is calculated on the amount of the invoice after deducting the commercial discount. So if you have an invoice of €100 with a 10% commercial discount, VAT is calculated on the new invoice amount of €90. If the VAT rate is 21%, the vAT amount is €18.90.
How do you register an invoice with a commercial discount?
Registering an invoice with a commercial discount can easily be done using an accounting programme. In this, you can have the discount processed automatically when preparing invoices and the programme can also calculate the vAT correctly based on the discount you apply.
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How to deal with incorrectly prepared invoices?
If you receive an invoice that has been drawn up incorrectly, for example because the vAT has not been calculated correctly or the discount has not been applied correctly, it is important to correct it as soon as possible. Contact the sender of the invoice and ask for a corrected invoice. If you have made a mistake yourself, it is best to execute a credit note.
Also be sure to view our blog article on the 5 most common invoices mistakes!
Conclusion
Managing commercial discounts on your invoices is an important aspect of your accounting. It is important that you know how to apply these discounts correctly and how they affect vAT. We hope this blog article helped you and remember: if you ever need help, we are here for you! 😊
