Cash discounts in Odoo – boost your cash flow the easy way

May 4, 2023 | Odoo, Odoo

Quick and timely payments from customers are essential to maintain the liquidity and cash flow of your business. But how can you encourage customers to pay their invoices promptly? Cash discounts are a great option here – a payment discount granted to customers if they pay their invoice within a certain period of time.

Odoo offers a simple solution to create discount terms and manage discount postings and payment reconciliations automatically. When you define payment terms in Odoo for cash discounts, the system automatically calculates the discount amount when an invoice is paid within the discount period and posts the discount amount to the corresponding discount account. Thus, handling cash discounts with Odoo becomes easy and hassle-free!

Cash discounts in Odoo 16 – Fully automated thanks to separate settings option

The option to offer cash discounts with Odoo was already available in earlier versions, but it still required some manual settings. For the release of the 16th version, Odoo has improved this significantly and made the settings more precise. Users can now define discounts separately in the payment terms, and enable Odoo to automatically factor in the discount during payment reconciliation. This provides several benefits:

You can define different cash discount rates and periods for different customer groups or products.

You can consider different tax regulations by freely specifying whether the cash discount is calculated on the total amount inclusive or exclusive of taxes.

Invoice items can now be clearly separated, as users can clearly assign discounts and cash discounts to individual items and get a better overview of the items included.

Discounts can be listed and differentiated clearly, providing a better overview of the discounts and cash discounts included in the invoice.

The clear assignment of discounts and cash discounts to individual invoice items and the improved listing of discounts makes it easier to evaluate accounting and follow-up reports.

Setting up cash discounts in Odoo: this is how it works

Setting up cash discounts in Odoo helps companies to incentivize customers for prompt payment and thus improve their cash flow. In the following, we will show you how to set up cash discounts in Odoo yourself. Please note that the steps may differ depending on the Odoo version you are using.

Step 1: Create Payment Terms

To use cash discount in Odoo 16, you first need to create a payment term with cash discount. To do this, go to the “Accounting” module and select “Payment terms” from the “Configuration” menu.

Then click on “New” to create a new payment term.

Odoocashdiscount1

Step 2: Create new payment term

Specify a name for the payment term as in this example “2/7 Net 30“. You can also add a description of the payment term that will be displayed later on your invoices.

Fill in the fields “Discount %” and “Discount days” according to the desired discount conditions.

Odoocashdiscount2

Step 3: Create an invoice & apply cash discount

Now create a new sales invoice by opening the “Customers” drop-down menu in the top left menu and then clicking on “Invoices“. Click on “New” and fill in all the necessary fields and then select the payment term with discount that you created earlier.

Odoocashdiscount3

Step 4: Register the Cash Discount in Payment

After you have created the invoice, go to “Confirm” and then “Register Payment“. In the window that appears, select the “Mark as fully paid” option, and click “Create payment“. Once you have registered the payment, the discount will be calculated automatically.

Step 5: Verify posting in Accounting

To ensure that the entry was registered with the correct journal items, go to “Payments” and select the payment in question. Click on the “Journal Entry” tab in the upper right corner and verify that the discount was posted correctly. You should be able to see the individual journal entries for the cash discount and make sure everything was posted correctly.

That’s it! These are the basic steps to set up and apply cash discounts to invoices in Odoo 16. Of course, you can also apply cash discount terms to specific products by configuring them on product or customer level.

Optimize your cash flow automatically with Odoo’s cash discount function

Set up cash discounts with Odoo, incentivize fast payments to secure liquidity! Define cash discount terms effortlessly and have discount bookings managed automatically. So you can focus on what really matters: Growing your business. Contact our experts for a personal consultation on Odoo and how it can help you improve your processes!

 

Odoo topics that might also interest you:

Recent Posts

Odoo 17’s hidden feature for selling digital products

Odoo 17’s eCommerce and Website apps allow users to create webshops that are easy to use. From a variety of configurable product types and categories to sleek webshop displays and upselling features, there’s very little Odoo can’t do. However, some features of Odoo's...

read more

5 Effective Ways AI Is Used in Odoo 17

The world continues to rapidly shift towards AI and its many applications, with no signs of slowing down! Companies adopting AI are already seeing impressive results in key business areas like insights & forecasting, sales, and cost management. As AI's influence...

read more

much. Chats: An Interview with Cláudia Cabral

We want to take you behind the scenes and introduce you to all the friendly faces and bright minds here at much. Consulting - and we're back another Consultant interview! We have invited several members of our team for a series of interviews, where we dive into their...

read more

much. Chats: An Interview with Eleni Bagklaridou

We’re back for another round with one of our Consultants. We have invited several team members for a series of interviews, where we dive into their thoughts on working in consultancy, on working at much., and much more! As there’s no better way to do this than through...

read more

much. Chats: An Interview with Aurore Le Tumelin

We want to take you behind the scenes and introduce you to all the friendly faces and bright minds here at much. Consulting. As there's no better way to do this than through their own words, we've put together a series of interviews with our team members to pick their...

read more

Odoo 17 Tutorial: Make-to-Order Process

Make-to-order (MTO) is a common practice for businesses that offer customized products tailored to the specific wishes of their customers.  It is a great method to keep inventory costs low as it means that production begins only after a customer places an order. Yet...

read more

Odoo 17 Tutorial: Setting up Inventory Routes

Routes play a crucial role in managing inventory workflows. The Routes and Rules feature in Odoo’s Inventory app allows users to define the path that products take as they move through the warehouse. In this step-by-step guide, we will walk you through the process of...

read more

Odoo 17 Tutorial: 3-Way Matching in Purchasing

The 3-way matching feature is a key feature of Odoo’s Purchase app. 3-way matching ensures you pay vendor bills only after receiving the items listed in the purchase order. Odoo 17 makes this easier by linking purchase orders, invoices, and goods received notes...

read more

Odoo 17 Tutorial: Setting up Vendor Pricelists 

The Vendor Pricelist feature is a key feature of Odoo’s Purchase App. It allows your purchasing team to manage and track the prices offered by different suppliers for specific products. The process is intuitive in Odoo 17 and allows you to keep an overview and make...

read more

Meet much.! Learn more about our team

You would like to get personal consultation about Odoo? Talk to our experts!

    Weitere Beiträge, die Sie interessieren könnten