How to Set Up a Cash Discount in Odoo
Cash discounts are defined as incentives provided by a seller to a buyer in exchange for paying a bill in full earlier than the due date. In a cash discount, the seller typically lowers the amount owed by the buyer by a modest percentage or a predetermined sum of money.
It plays an important role in ensuring that you will have returning customers for your businesses. However, understanding and configuring the feature can take up quite a lot of time, even more so for those that need to be used to accounting software.
That is why we will go over How to set up a cash discount in Odoo in this specific tutorial. And in just 2 simple steps, everything will be good to go!
Table of Contents
- Why are cash discounts important for your business?
- How to set up a cash discount in Odoo
Why are cash discounts important for your business?
On top of providing superb services and selling high-quality products, there are various methods that can boost the relationship between the customers and your business. Enabling cash discounts has many advantages, one of which is that it increases the likelihood that a buyer would make a prompt payment, giving the seller access to funds more rapidly. Having money sooner rather than later enables the seller to reinvest the money in the company more quickly, which is a good goal for any organization.
Cash discounts could also help a company keep more of its sales and profits. Before extending customers substantial lines of credit, savvy businesses thoroughly investigate them. There is, however, always a danger that a buyer will file for bankruptcy or leave town. Bad debts must frequently be written off by businesses. A cash discount can imply that the company only obtains 99 or 98 percent of the sale price, but it might also mean that the company ends up with more money overall.
How to set up a cash discount in Odoo
So, those are some of the benefits that offering cash discounts in your shop can bring you. As for the actual progress of setting up the discounts, we will get into it now.
Step 1. Enable cash discount
As per many features, you can use in Odoo, cash discounts also need to be enabled before being put into use. A very efficient way to do that is to access the Configuration drop-down menu from your Accounting dashboard. Underneath the menu, you will be able to find the Management button. Click on it, then locate the Payment terms button. Clicking the Payment Terms button will redirect you to a page consisting of existing payment terms.
Since we are trying to set up the cash discount feature, we will create a new payment term. To do that, you will need to click the Create button on the top left corner of the page. When you do so, Odoo will lead you to a blank form, which shall look like the photo below, to configure your new payment term.
For this step, we will focus on the top section of the form. As can be seen from the illustration image, there are 3 fields below that you will need to complete:
- Payment Terms: For this field, please enter the general description of what your cash discount entails. An example in the demonstration picture is
-2% off 10 days or fill the amount in 30 days.
- Company: Please enter your company name, and make sure to specify which branch if there is more than one.
- Description of the invoice: This is where you can describe the payment term in a more detailed and casual manner for your customer to help them better understand the terms.
When you are done with this section, it means that you have made it halfway through our tutorial already!
Step 2. Add a Percent type
This step does not require any changing of the page, as you will still be operating on the same payment term form. As you can see, underneath the part we just worked on earlier, there is a section called Terms. The Terms part contains lines of pre-existing term types for your cash discount feature. Additionally, please keep in mind that the last line in this section should always be Balance, so as to keep the total amount apportioned.
For the sake of this tutorial, we will be creating a new type line. To do that, please click on the Add a line button. When you do so, a new window called Term type will appear.
Now that the window is opened, we can start working on setting the percent type for our line. As you can see, this window will have 2 main sections, Type and Due Date Computation. As for the Type part, please complete the fields below:
- Type: This field offers you three options:
Fixed Amount. Since we are working with the cash discount feature, you should opt for the
- Value: Since we chose the
Percenttype earlier, we will set a value for this field. For this tutorial, we offer a 2% discount to the customers, so the value should be 98.
After you are done with those two fields, we can swiftly move on to the Due Date Computation section, where everything will be tied in together just by filling in these fields:
- Due: For this field, you can set a deadline for how many days after your initial invoice your customer has to pay off the charge. In this illustration image, the deadline is 11 days.
- On the: This is also one way to set a deadline for your payment, where the customer should pay on a certain day of the month.
After you are done double-checking for possible errors and typos, you can click the Save button to officialize everything. This also means that you are done with the process of How to set up a cash discount in Odoo!
In order to guarantee that you will have repeat consumers for your organization, cash discounts are crucial. However, for those who are unfamiliar with accounting software, understanding and implementing the feature might take quite a bit of time.
This technique we showed you enables you to set up any kind of discount operations in a traditional and conventional manner, which is advantageous for the company’s operations both now and in the future.
So, this is the end of our How to set up a cash discount in Odoo tutorial. We hope that you will find it helpful. In case you come across any software errors, please do not hesitate to contact Odoo’s customer service to ask for instructions!
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