Discount Accounting in ERPNext: Posting Discounts to a Separate Account
Discount Accounting lets you post additional ledger entries for discounts under a separate Discount Account, so discounts are tracked in their own account rather than just netted into sales or purchases. It works for two kinds of discount:
- Discounts applied on individual Items.
- Additional Discounts applied across all the items in an invoice.
Steps
- Check the Enable Discount Accounting box in the Accounts Settings page.
- Create a Sales or Purchase Invoice as usual.
- To post ledger entries for discounts on individual items:
- Expand the row for that item in the Items table.
- Enter the discount in the Discount and Margin section.
- Scroll down to the Accounting Details section and enter the Discount Account.
- To post ledger entries for an Additional Discount on all items in the invoice:
- Go to the Additional Discount section.
- Enter the Additional Discount Amount or Percentage and the Additional Discount Account.
- Save and submit the invoice to create the discount ledger entries — generated for both Sales Invoices and Purchase Invoices.
NOTE
The discount-account fields only appear once Enable Discount Accounting is switched on in Accounts Settings. If you can’t see where to enter a Discount Account on an invoice or item, that setting is the first thing to check.
Default Discount Account
You can also set a Default Discount Account for an Item, which is then fetched automatically while creating an invoice. Like the fields above, this is only visible when Enable Discount Accounting is checked in Accounts Settings.
- Open the Item document.
- Go to the Item Defaults table in the Sales, Purchase, Accounting Defaults section.
- Expand the row of your choice and enter the Default Discount Account for the item.
TIP
Set a default discount account on the items you regularly discount. It’s fetched automatically onto invoices, so your team doesn’t have to pick the account each time keeping discount postings consistent and reducing the chance of a wrong account.
Related Topics
- Accounts Settings
- Sales Invoice
- Purchase Invoice
- Item
SUMMARY
Discount Accounting posts discounts to a separate Discount Account, for both item-level discounts and invoice-wide additional discounts. Enable it in Accounts Settings, then on a Sales or Purchase Invoice enter a Discount Account in the item’s Accounting Details (for item discounts) or an Additional Discount Account in the Additional Discount section (for invoice-wide discounts), and submit to create the ledger entries. You can also set a Default Discount Account on an Item via its Item Defaults, fetched automatically on invoices visible only when Discount Accounting is enabled.
