Are you processing invoices and creating bills for vendors and want to add a discount to it? This article will show you how to configure your discount settings, add discounts to bills, combine (suppress) discounts on an owner statement and more.
When you choose a vendor as the payee, a field for adding a discount percentage will appear. If you enter the percentage amount, the discount will automatically be applied to the bill.
You can also add a default discount percentage on the vendor contact that will automatically be added to any bills where the vendor is the payee (the one being paid on the bill). The complete bill amount will still be charged to the owner or unit, but the vendor will receive a reduced percentage, and your property management company will collect that difference.
Sections of this article:
- Configuring Discount Settings
- Adding a Discount to a Bill
- How a Discount Works
- Setting Up Default Vendor Discounts
- Hiding/Showing Discount Bill on Owner Statement
Setting Up Discount Settings
To get started you will first need to configure your accounting settings so discounts are enabled (This is usually done during onboarding so if you already have this setup skip to adding the discount). To set this up you need to go to your global settings by clicking the ellipses next to your name in the bottom left and clicking "Settings". Then you will click "Accounting Settings"
When in here you will scroll down until you find the settings labeled "Billing". If the toggle is off for "Vendor Discounts Enabled" click on the edit button and make sure this is toggled on and select a default vendor discount chart of account.
If you do not have a designated vendor discount chart of account, you will want to create one first and then come back and select it as the default chart of account to use for vendor discounts. If this was not done during onboarding you can follow this article on creating a COA by clicking here.
Here is an example of how the chart of account for vendor discount should be set up
Adding a Discount to a Bill
Once the previous steps are complete you can either go to a specific work order and add a bill or go to the accounting tab and add a bill. From a work order, click the green actions button and click record bill. This will automatically add the vendor as the payee on the bill. Since the vendor is already selected you will see the field for Discount %. Enter the desired discount percentage.
Alternatively, you have the option to directly add a bill without the need for a work order. To do this, click the accounting tab and click money out. From here, click the green actions button and click "Add Bill". Once you select the vendor, you will see the field for Discount % . Again, you can enter a discount % and it will automatically reduce that from the amount of the bill charge.
How a Discount Percentage Works
Adding a discount percentage will not reduce the amount the payer (typically the owner or unit) needs to pay on the bill. Instead, the owner or unit will be responsible for paying the full bill amount, while the vendor will receive a reduced payment based on the percentage of the discount applied. The discounted portion of the payment that is withheld from the vendor will be allocated to your property management company. Consequently, the system will generate two bills for the owner: one for the vendor's specified amount and another for the discounted amount.
Here is an example of this in action. Let's say there is a 10% discount applied to a $100 work order expense bill. Once you select the owner or unit paying this, the account and the amount, you will be able to see the "Total to Payee" and the "Total Discount". The Total to Payee amount is the amount that will go to the vendor. The Total Discount amount is the amount that will go to your property management company. The "Total to Bill" is the amount that the owner or unit will pay.
Default Vendor Discount Amounts
If you want to have a vendor set with a default discount percentage, you can set this at the vendor contact details page. To do this, from the left navigation menu, go to contacts and click vendors. Click on a specific vendor to view their details. In the details box you can click the pencil icon to edit. There is a field in here for discount percent. The percentage entered here will automatically show on any bills where the vendor is selected as the payee.
This will need to be set on every vendor contact individually on all the vendors you would like to have a default discount percentage.
Showing/Hiding Discount on Owner Statement
The discount can be shown on the owner statement how it actually is. For the example above $90 to the vendor and $10 discount amount to your property management company. It can also show as combined so the owner will only see the full $100 amount that they paid for that bill and not how it was split.
If you would like the discount to show on the owner statement you will need to go to the owner statement profile you have set up for the portfolio. You can get here by going to Settings/Statements and then click on the specific owner statement profile you want to edit. In the top statement settings box click the edit button. Make sure the toggle for Combine Discount is turned off.
This will make it so on the statement the owner will see two line items for each of the bills that were actually created. One will show an expense paying the vendor and the second will show a bill paying for the vendor discount expense. Please see below for an example.
If you would like to combine the discount so the owner can't see those separate line items you can go to the same place under Settings / Statements, and the specific owner statement profile you would like to edit. When you click edit make sure that the toggle is turned on for Combine Discount.
This will make it so the owner sees one line item for paying the vendor for that whole amount instead of those two separate bills. Please see below for an example of how that will look on an owner statement.