For those who want to offer their clients an incentive to pay invoices promptly, MoneyPenny introduced the ‘Cash discount’ option. This “early payment discount’” is used to improve the cash flow. For instance you can allow a special discount of 5% if your client will pay the invoice within 3 days of receiving your invoice. With MoneyPenny you can set it up easily, within seconds, by either choosing cash discounts as a default option straight from “Client details” or you can handle them individually, while creating invoices.
You define your own terms, such as:
– “Cash discount percentage”– the percentage of the invoice’s total amount;
– Number of days they have to make the payment, for the discount to be applicable.
To setup a cash discount, just pick among the following two options:
- Setup a cash discount for a specific client from “Client details’”➝ “Client default settings”.
Every time you will invoice this client, this discount will be active automatically.
- Offer individual cash discounts, directly in the invoice. If you change your mind and wish to deactivate cash discounts at some point, for a certain invoice, just untick the “Granted cash discount” box.
What happens when your clients use a cash discount?
When the payment is made, you will see a new payment entry in your MoneyPenny payments list. It will be the invoice amount minus the cash discount amount.
At the same time, MoneyPenny will automatically create a new expense named “Granted Cash Discount” with the cash discount amount.