Handling Discounts and Coupons

Everybody likes feeling special. Discounts and coupons are two tools you can use to make your customers feel like they are important to you and getting a great deal on the services you offer.

Both methods allow you to reduce the total amount the customer owes you on an invoice. The primary difference between them is that a coupon reduces the invoice by a preset amount whereas a discount reduces it by a percentage instead. Let's look at both of them in detail so you can see how they are used and how to set them up.

Discount billing codes apply to everything above them on the invoice. So if you want to provide a labor discount, be sure to enter all your labor codes on the invoice first. Follow that up with the discount billing code and then add all the non-discounted parts, material and other charges afterwards.

It is also possible to have more than one discount code on an invoice. When you do that each discount code affects all the items above it on the invoice until it either reaches the top of the invoice or another discount code. So it would be possible to give a customer a 10% discount on parts and a 5% discount on labor by adding the parts to the invoice followed by the 10% discount code. The labor would be entered after that followed by the 5% discount code.

To create a discount billing code go to Sales | Enter Billing Codes and click Add New. Assign it a Code and set the Type to Discount. Leave the Rate blank to inherit the customer's default when it is applied to the invoice or enter the desired discount percentage here. Regardless of what you select here you will always have a chance to change it when you apply the discount code to the invoice.

If you leave the Description field blank, the description that will appear on the invoice will automatically be changed to the discount percentage followed by the word discount.

In the following example the DISC code that comes with ESC has been applied to only the labor on the invoice.

Coupons on the other hand, will reduce the invoice by a flat amount. This allows you to put the coupon code anywhere you want on the invoice.

To create a coupon billing code go to Sales → Enter Billing Codes and click Add New. Assign it a Code and then enter the Descriptionexactly the way you want it to appear on an invoice. Change theType to Other and set the Rate to the amount of the coupon written as a negative number. The example below shows a coupon created for a newspaper ad that gives the customer $50.00 off the normal price of a tune up.

It is generally a good idea to create different billing codes for each coupon you offer. This allows you to see how many times each coupon was used on the Monthly Product Usage Chart (under Sales → Reports). Start all coupons with the same designation (such as C-) so you can easily enter them on the invoice and group them on the report.

Written by Eric Rausin
Featured in January 2011 Newsletter