Discount

Discounts come in a few patterns, and the difference matters for the buyer's accounting and your own. A line-level discount reduces a specific line's unit price or line total. An invoice-level discount reduces the subtotal across the board. A trade or volume discount is built into the unit price itself and never appears as a separate line. An early-payment discount sits outside the invoice maths altogether: it is conditional on payment timing, deducted by the buyer when they pay early.

The standard order of operations is: line items add to a subtotal, the discount comes off the subtotal, tax is calculated on the discounted amount, and the total reflects everything. Applying the discount before tax means the tax base is lower; applying it after tax means the buyer pays slightly less but the invoice tax does not match the post-discount amount, which creates reconciliation work. Pre-tax discounts are the default in VAT and GST jurisdictions for that reason.

State the basis on the invoice. "10% discount on subtotal" reads cleanly. "GBP 100 off invoice" reads cleanly. Mixing both, or leaving the basis ambiguous, sets up the kind of penny-difference dispute that wastes an hour with the buyer's AP team for no benefit.