Type. Choose Discount item in the drop-down list.
Item Name/Number. Name your item.
Subitem of. Check this box if the new created discount item is a subitem of another discount item.
Description. Enter description of the item.
Amount or %. Enter a positive number to deduct a dollar amount. Enter a positive number followed by % (percentage) to deduct a percentage.
Account. Select the account to which you want to reflect the discounts in your chart of accounts. You can choose an income or expense account. The difference being showing as a negative amount if you post it to income account, and a positive amount if you post it to an expense account.
Sales Tax Code. Most businesses usually choose a taxable tax code in this field, as it applies the discount before sales tax is calculated. Otherwise, choose non-taxable.
Now, let’s create an invoice and apply the Holiday Discount to it:
Note that when applied to invoices, discount items calculate discounts to the item immediately above it. So, if you want to discount from more than one item (say, your customer buy more than one products or services), you have to subtotal it before you apply the discount item.