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Accounts Receivable departments often need to model or show discounts on invoices. This help article explains some of the ways to model this and what things you should take into consideration. If you are writing off bad debt, see Client does not pay invoice or underpays invoice. If you are trying to refund money from a previous invoice, see Creating Credit MemosWhen to Use a Credit Memo. If you are trying to show a discount on your invoice, continue reading. |
Contract Revenue vs Billing Adjusted Revenue
If you are not familiar with Contract Revenue and Billing Adjusted Revenue (BAR) in Projector, you should familiarize yourself with them. They are very important concepts that are using throughout the product. See Explain the different types of revenue in Projector.
- Contract Revenue - the agreed rate you will charge a client for work
- Billing Adjusted Revenue - what you actually charged the client
If you use an invoice template ending in "D" like A100D or A200D, then they can modified to show you the delta between Contract and BAR as well as the percentage difference between the two. This is one way of showing a discount.
This method only work for billed time cards on T&M or NTE time contracts. Fixed price doesn't invoice time cards and so this method will not work.
Negative Milestone
For fixed price contracts you can create a negative milestone. Make sure you also reduce the contract amount to reflect the reduction in price.
For T&M/NTE contracts, only use a negative milestone if you are returning some of a prepayment. If it is not for a prepayment, you shouldn't be doing it. Use one of the other methods on this page.
Negative Soft Cost
If you choose to use a negative soft cost, the discount will be reflected on the cost side rather than the the time side. Discounts of this type affect project profitability without affecting resource profitability.
Negative soft costs can be used for T&M, NTE, or FP time contracts.
Negative soft costs can be used for T&M or NTE cost contracts.
Negative Expense
Similar to a negative soft cost, you can create negative cost cards. The difference is that expense, vendor invoices, and subcontractor invoices are associated with a resource or vendor. You may not want to be cutting them negative AP item.
Negative expenses work for T&M or NTE cost contracts. They are not an option for FP cost contracts.
Credit Memo
For previously invoiced time or cost cards, you can issue a credit memo to refund money.