Document-level discount on a commercial document is a discount applied to the entire invoice total, not to each individual line item. It is applied before calculating VAT, which means the tax is calculated on the amount after the discount directly, not on the full amount.
Illustrative Example:
Invoice total 2,500 SAR, discount 500 SAR → 15% tax is calculated on 2,000 SAR only, not on 2,500 SAR.
Clear Calculation Example
Subtotal (before discount): 2,500.00 SAR
Discount: – 500.00 SAR
Total before tax (after discount): 2,000.00 SAR
VAT 15%: 300.00 SAR
Final Total: 2,300.00 SAR
How do you activate document discount?
1. Open Sales Invoice Settings or Purchase Invoice Settings
Go to Settings ← General Settings, then select the “Sales Invoice Settings” or “Purchase Invoice Settings” tab from the top options.
2. Enable the “Enable document total discount” option
In the Main Details section, you will find a toggle button next to this option. Click it until it becomes enabled. Once activated, the discount field appears automatically in every new document.
3. Select the default discount account
Select the account where the discount will be recorded accounting-wise:
- For sales invoices: an expense type account
- For purchase invoices: a revenue type account
The system automatically saves the last account used for next time. The selected account is the default account, and you can change it when creating an invoice to any other account as needed.
4. Save the settings and start creating your documents
After saving from the bottom of the page, when you open any new invoice, you will find the discount field displayed in the totals section at the bottom of the document. Enter the discount value and the calculation will be recalculated automatically. You will also see next to the discount line item “the discount account that the discount will be transferred to” and it can be modified if the user has the permission.
Important Note: The total document discount before tax is entered as a fixed amount only, and cannot be set as a percentage directly from within the discount field. If you want to apply a discount at a certain percentage, you can calculate the percentage manually and then enter the resulting discount amount in the field. Example: If the total is 10,000 SAR and you want a 5% discount, calculate 10,000 × 5% = 500 SAR, then enter 500 in the discount field.
Controlling discount permissions for each user
You can set the allowed discount percentage for each employee individually. To access these settings, go to:
Settings, then Users, then click the “Edit” option next to the desired user and you will see:
1. Maximum discount per line item %
The maximum discount percentage a user can apply to each individual line in the document
2. Maximum discount on document %
The maximum discount percentage a user can apply to the entire invoice total
3. Ability to change the default account
Determine whether the user is allowed to change the discount account in each document, or if the account remains fixed
What appears in the printed invoice?
When applying a document discount, a clear totals section appears in the invoice containing:
Subtotal before discount → %%total_before_discount%%
Discount → %%cd_discount%%
Total before tax (after discount) → %%total_before_vat%%
VAT → %%total_vat%%
Final Total → %%total_amount%%
Tip: In the template designer, you can add these fields by clicking ( … ) next to the toolbar and then from the “Document Details” menu in the bar. Look for “Total before discount” and “Discount”.
Supported documents
Document discount includes all the following types of commercial documents:
- Quotes
- Sales Invoices
- Credit Notes
- Purchase Orders
- Purchase Invoices
- Debit Notes
Note:
- Credit and Debit Notes automatically inherit the discount method from the original invoice associated with them. The update applies only to new documents and does not affect previously approved or paid documents.
- Draft invoices take the original discount method when created
Frequently Asked Questions
Does the discount affect VAT?
Yes, the discount directly reduces the tax base. This means VAT is calculated on the amount after the discount, not before, which means the customer pays less tax when a discount is applied.
Does activation affect old invoices and documents?
No. Previously approved, paid, or saved draft invoices will not be affected in any way. Document discount applies only to new documents that you create after enabling the option.
Is the method compatible with ZATCA requirements?
Yes, the method is fully compatible with ZATCA’s e-invoicing requirements. You will not encounter any warnings or errors when submitting invoices, and the electronic invoice file (XML) correctly reflects the discount.
Does document discount affect inventory costs and profit margin?
Profit margin and inventory cost reports may be affected because the discount is no longer distributed across individual line items, but is applied at the entire document level.
Can I set a maximum discount for each employee separately?
Yes. Through user settings, you can set a maximum discount at the line item level and another at the document level for each user. You can also control whether a user has the permission to change the accounting account for the discount.
What is the difference between line discount and document discount?
Line Discount:
Applied to each product or service individually within the invoice, such as giving a 10% discount on a specific product only.
Document Discount:
Applied to the entire invoice total after collecting all line items, such as giving the customer an overall discount on the entire invoice. Both can be used together in the same document.
Note: This feature is now available to all customers
