Discount Accounting is utilized to record extra ledger entries for discounts, allocated to a distinct Discount Account. This is applicable for:

• Discounts granted on specific Items.
• Extra Discounts granted on all Items within an invoice.

Steps

Follow these steps to enable Discount Accounting:

1. 1. Enable the “Enable Discount Accounting” option in the “Accounts Settings” page.
   2. Create a Sales/Purchase Invoice as usual.
   3. To record ledger entries for discounts applied on individual Items:
      • Expand the row for the specific Item in the Items table.
      • Enter the discount in the Discount and Margin section.
      • Scroll down to the Accounting Details section and specify the Discount Account.
   4. To record ledger entries for Additional Discounts applied on all Items in an invoice:
      • Navigate to the Additional Discount Section.
      • Enter the Additional Discount Amount/Percentage and the Additional Discount Account.
   5. Save and submit the invoice to generate ledger entries.

Default Discount Account

You can also specify a Default Discount Account for an Item, which will be automatically retrieved when creating the Invoice. The availability of this field depends on whether the Enable Discount Accounting option is selected in the Accounts Settings.

Here’s how to set a Default Discount Account for an Item:

1. Access the Item document.
2. Navigate to the Item Defaults table within the Sales, Purchase, Accounting Defaults section.
3. Expand the row corresponding to your selection and input the Default Discount Account for the Item.