## Documentation Index

Access the complete documentation index at:
https://www.zoho.com/en-sg/books/help/llms.txt

Use this file to discover all available documentation pages before proceeding.

# Early Payment Discount

In Zoho Books, you can offer discounts to customers who pay their invoices within a specified number of days before the due date.

**Note:** This feature is available only for certain plans of Zoho Books. Visit the [pricing page](https://www.zoho.com/books/pricing/) to check if it’s available in your current plan.

**Note:**Early payment discounts cannot be applied to online payments made through payment gateways, including card payments, digital wallets and bank transfers.

## Enable Early Payment Discount

To apply early payment discounts to your invoices, you need to enable the feature in your organisation. Here’s how:

*   Go to **Settings** in the top right corner of the page.
*   Select **Invoices** under _Sales_.
*   Check the **Apply a discount when a customer makes an invoice payment before the due date** box.
*   Select an account to track the early payment discounts in your organisation from the dropdown.
*   Click **Save**.

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## Configure Payment Terms

**Payment Terms** in invoices specify the conditions under which a payment should be made. You can offer early payment discounts to customers by configuring payment terms. Here’s how:

*   Go to _Sales_ on the left sidebar and select **Customers**.
*   click **\+ New** on the top right corner of the page.
*   Select the **Customer Display Name** and enter all the necessary details.
*   In the _Other Details_ section, click the **Payment Terms** dropdown.
*   Click **Configure Terms**.

![Configure Payment Terms](/books/help/images/invoice/configure-terms-customer.png)

*   In the next popup, you can configure payment terms by either editing the existing terms or creating a new term.
*   To edit the existing terms, modify the **Number Of Days**, **Days**, and **Percentage** in the _Configure Payment Terms_ pop-up and click **Save**.
*   To configure new terms, click _Add New_ and enter the **Term Name**, **Number Of Days**, **Days**, and **Percentage** in the pop-up that appears and click **Save**.

Field

Description

**Number Of Days**

Enter the number of days by which the payment should be due.

**Days**

Enter the number of days before the due date during which the early payment discount can be applied.

**Percentage**

Enter the early payment discount percentage. Note that the percentage cannot be edited while recording payments.

You can modify these fields for this customer later, either on the invoice creation page or when recording their payments.

* * *

## Configure Early Payment Discount for Invoices

To configure early payment discount for an invoice:

*   Go to _Sales_ on the left sidebar and select **Invoices**.
*   Click **\+ New** on the top right corner of the page.
*   Select a **Customer Name**, **Invoice Date,** and enter all the other necessary details.
*   In the **Early Payment Discount** field, enter the **Days** and **Percentage**.

**Note:**If you have already configured payment terms for the selected customer, the _Days_ and _Percentage_ fields will be auto-populated.

![Configure Discount](/books/help/images/invoice/early-payment-discount-config.png)

*   Click the **Edit** icon in the _Early Payment Discoun_t section to edit the discount amount.

![Edit Early Payment Discount amount](/books/help/images/invoice/edit-early-payment-discount.png)

The **Total After Early Payment Discount** field displays the total amount after deducting the early payment discount from the invoice total.

*   Click **Save as Draft** or click **Save and Send** to send the invoice to your customer.

**Note:**The payment term you configure for your customer will be tracked under separate income accounts. To change the accounts, go to _Settings > Preferences > Accountant > Early Payment Discount_ and click **Configure Accounts**.

* * *

## Apply Early Payment Discount to Payments

When you apply early payment discount to an invoice payment, the discount amount will be divided proportionally between the sub total and the tax amount.

Let’s say the total of an invoice is €100, with a 10% tax rate. If you apply a 2% early payment discount, you save €2. This discount will be split between the invoice total and the tax amount. €1.82 will be deducted from the invoice total, reducing it to €98.18, and the remaining €0.18 will be deducted from the tax, bringing it down to €9.82. The total amount after the discount will be €108.

You can apply early payment discounts when you record payments for your invoices. Here’s how:

*   Go to _Sales_ on the left sidebar and select **Invoices**.
*   Select the invoice for which you want to record the payment.
*   Click **Record Payment** in the top right corner of the page and select **Record Payment** from the dropdown.
*   In the next page, the **Early Payment Discount** amount will be auto-populated based on how you configured the payment terms. You can also edit it.

![Apply discount](/books/help/images/invoice/apply-early-payment-discount.png)

*   Click **Record Payment**.

**Note:**The early payment discount is based on the exchange rate as of the invoice date, regardless of any changes in the exchange rate by the time of payment.