how to apply an early payment discount?

Welcome to the Community, Melinda! I'm thrilled to see you make your first post! Keeping track of your real-life sales transactions is crucial for monitoring your revenue. I'm here to assist you in making sure your early payment discounts and credit memos are applied properly, ensuring your financial data remains accurate.

Let's start with how to apply an early payment discount. You have the flexibility to choose whether you want to implement it to the entire transaction or just a specific item. This can be done on your invoice, estimate, or sales receipt.

Begin by turning on the Discount option in your account settings. Follow these steps to complete the process:

1. Go to the Gear icon at the upper-right corner of your QuickBooks dashboard and select Account and settings.
2. Pick the Sales tab.
3. In the Sales form content section, click the Edit (Pencil) icon.
4. Turn on Discount.
5. Hit Save and then Done.

Right after, create a sales transaction to apply an early payment discount. If you want to add it as a percentage of your subtotal, perform these steps:

1. Choose the + New button.
2. Select Invoice, Estimate, or Sales receipt.
3. Fill out your invoice, estimate, or sales receipt.
4. Optional: To apply a discount before sales tax is calculated, select the double arrow icon next to the discount field. This switches the order of the tax and discount fields.
5. For the discount, hit $ for a flat discount or % for a percentage discount.
6. Enter the percentage or amount you want to discount in the discount field.
7. Hit Save or Save and close.

If you want to enter a discount as a specific item, you'll first need to set up a service item and then incorporate it with a negative rate and a description. For more details about this and the procedure above, please see this article: Add a discount to an invoice, estimate or sales receipt in QuickBooks Online.

On the other hand, you can apply a credit memo when recording a payment for a customer's invoice or if they want to immediately reduce their current open balance. You can set this up automatically or do it manually with the Automatically Apply Credits option. Here's how to enable or disable the said feature:

1. On your dashboard, go to the Gear icon and select Account and settings.
2. Pick the Advanced tab.
3. Click Edit in the Automation section.
4. Turn on Automatically apply credits if you want to automatically apply credits to customer balances or open invoices. Turn it off if you want to decide which open invoices you want to apply credit memos to.
5. Hit Save, then Done. 

Go over this article for helpful information on giving credit memos to customers: Create and apply credit memos or delayed credits in QuickBooks Online.

Additionally, would you like to see your best-selling products, get insight on the things you buy and sell, and your cost of goods? Get all this information by generating sales reports in QBO.

Moreover, have you heard about our QuickBooks Live Expert Assisted team? They're great at making it easier to manage your revenues and finances. I highly recommend looking into their services; the support they provide could greatly help you with your accounting!

If you have any more questions or need further clarification about applying discounts to your transactions, please feel free to click the Reply button. I’m always here to help! I wish you all the best, Melinda. Have an amazing day ahead!