---
title: "Discount Accounting"
space: "Books"
url: "https://docs.frappe.io/books/discount-accounting"
updated: "2026-01-30"
---

Discount is a deduction that is applied to the cost of an item. Frappe Books supports applying discount to an invoice on an item-wise basis.

Enable Discount Accounting
--------------------------

To enable discount accounting, first navigate to General Settings: `Setup > Settings > General`

Then check the Enable Discount Accounting checkbox.

[![Enable Discount Accounting](https://github.com/frappe/books_docs/raw/master/docs/transactions/images/enable-discount-accounting.png)](https://github.com/frappe/books_docs/blob/master/docs/transactions/images/enable-discount-accounting.png)  


::: warning Once Discount Accounting is enabled, it cannot be disabled. :::

After that set the account that will be used for discounts

[![Set Discount Account](https://github.com/frappe/books_docs/raw/master/docs/transactions/images/set-discount-account.png)](https://github.com/frappe/books_docs/blob/master/docs/transactions/images/set-discount-account.png)  


::: info The discount account is an Indirect Income account, you can create it using the [Chart of Accounts](https://github.com/frappe/books_docs/blob/master/miscellaneous/chart-of-accounts) :::

Setting Discount Amount
-----------------------

Discount is applied on an item-wise basis. After you have enabled discount click on the edit button on the item row to set the discount.

[![Setting the Discount](https://github.com/frappe/books_docs/raw/master/docs/transactions/images/set-discount.png)](https://github.com/frappe/books_docs/blob/master/docs/transactions/images/set-discount.png)  


This will open Quick Edit Form to edit the invoice item values. Discount can be set in two ways:

1. Setting a Discount Percent (default)
2. Setting a Discount Amount

To set the Discount Amount click on Set Discount Amount. Once the Discount Amount or Percent is set the Discounted Amount will be shown.

::: tip Setting Discounted Amount You can directly set the Discounted Amount, Frappe Books will automatically calculate the item rate. :::

Discount After Tax
------------------

By default the Discount is applied before the Tax is calculated.

To apply the Discount after the Tax, select the Discount After Tax checkbox after opening the settings for the Invoice.

[![Discount after Tax](https://github.com/frappe/books_docs/raw/master/docs/transactions/images/discount-after-tax.png)](https://github.com/frappe/books_docs/blob/master/docs/transactions/images/discount-after-tax.png)