Early Payment Discount

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Early Payment Discount

You can give your customer a discount for paying their invoice early. Unlike the Order Pre-payment Discount, the new Early Payment Discounts are configured on a system-wide level, not for specific orders. The discount applied to the invoice will always be in the form of a Credit Memo, and the discount will apply to all invoices that fit the criteria set in the new system configurations.

You need to start by enabling the Early Payment Discount and setting the discount amount and invoice criteria. You can find the configurations under Settings > System Configurations > Finance > Payments.
Early Payment Configurations
Enable Early Payment Discounts
This configuration must be set to ‘yes’ in order for the Early Payment Discount to be applied. None of the other Early Payment Discount configurations will be relevant if this configuration is set to ‘no’. When set to yes, all invoices in your system that meet the criteria set in the other configurations will have show a discount until no longer eligible. The system will automatically generate a credit memo and apply the credit memo to close out the invoice.
Early Payment Discount Percentage
The value entered in this field is the percentage that each invoice gets discounted if the customer pays early. For example, if you enter 10 and the invoice is for $1,000, the customer will only have to pay $900; the rest of the invoice will be paid via credit memo.
Early Payment Discount Expire Days
The value entered in this field sets the number of days before the invoice’s due date that the invoice must be paid by in order to receive the discount. For example, if an invoice’s due date is 10/31, and this configuration is set to 15 days, the invoice would need to be paid by 10/16 to receive the discount. After 10/16, the full amount of the invoice would need to be paid.
Minimum Amount an Invoice Needs to Be to Be Eligible for an Early Payment Discount
The value entered for this configuration sets a minimum amount for an invoice to qualify for the discount. For example, if this configuration is set to $1000, then an invoice that totals $999 will not receive the discount, even if it meets the other criteria; this setting can be helpful if you only want discounts applied to large invoice amounts.
If an invoice matches the criteria, the user will see the early payment discount amount and date on the payment screen. If the entire invoice is paid in full before the early payment date, the system will create a credit memo(s) for the discount amount and automatically apply the credit memo to the invoice(s)
Tip
You can use both the Early Payment Discount and the Order Pre-payment Discount in conjunction in your site if you choose to do so.
Your cutomer can see the early payment discount on the invoice template and when paying for the item in client center.
Important
You must include the payment history element on the invoice template for the early payment notification to display.
When the customer goes to pay the invoice, he or she will see the oringial invoice amount, the early payment discount, and the amount due. The system will charge the amount due to the selected payment method and create a credit memo to close out the invoice.
The discount will automatically go away as soon as the expire days has past. To re-add the discount, the user would have to change the due date of the invoice.