If you are an businessmen or entrepreneur, surely you had or will have to offer a discount to your customers for the purchase of a product or service, and you will have asked yourself questions such as: what is the correct procedure to make a discount and what formulas do I have to apply? How does this affect VAT? Do I have to remove the VAT first and then lower the price and add the VAT again?
In this article we will help you to solve it.
To begin, we will know the two types of discounts that are most used. The first of them is called commercial and is applied to cash purchases. They are known as invoice footing and at the time of posting the discount is not considered.
On the other hand, there is the conditional or financial discount that is offered to encourage the timely payment of the client. For example, if the consumer requests a product on credit, you offer him a 5% discount if he liquidates it before the expiration date. This discount does have implications when it is accounted for.
To better understand each concept, we will explain it with examples.