A discount is easier to check when you write down the base amount, the discount type and the order of calculation. The common mistake is applying a percentage to a total that already includes another discount or a tax amount. Invoice discount calculations are easier to check when the base amount and discount type are written down.
Fixed amount versus percentage
| Type | Example | Discount |
|---|---|---|
| Fixed | Invoice subtotal 800, fixed discount 50 | 50.00 |
| Percentage | Invoice subtotal 800, 10% discount | 80.00 |
| Capped percentage | 10% discount, maximum 60 | 60.00 |
The figures are fictional. A cap changes the result; state it on the invoice so the customer can reproduce the calculation.
Decide the order
If an invoice has a line-item discount and a separate invoice-level discount, define whether the second applies to the discounted line total or the original subtotal. Apply tax only to the base your local rules require; this guide does not assume a universal tax treatment.
A worked example
Subtotal 800.00, less 10% = 720.00. Add a fixed 20.00 credit = 700.00. If tax is 5% on the discounted amount, tax is 35.00 and the total is 735.00. If the tax rule uses a different base, the result changes; label the method.
Check rounding at the end
Calculate the discount at the precision your invoice displays, then round the final amount consistently. Do not round each line and then recalculate the percentage on the rounded total without documenting the method.
Show the calculation
- State the discount type and rate or amount.
- Show the subtotal before the discount.
- Show the discount as a separate line.
- Show the final amount due and the currency.
Use the calculation checks guide for a second pass, and the field guide for the surrounding invoice details.
Related: clear service line items make the base easier to audit.
Keep a calculation note
Save the subtotal, discount rate or amount and final total with the invoice. If a customer questions the figure, the note lets you repeat the same steps. Do not rely on a calculator history that may be cleared; the invoice itself should show the result clearly.