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My supplier gave me 5% off for volume; how do I show that on the purchase order?

The purchase order has no discount line, so enter the net unit price you agreed after the discount: 20.00 less 5% is 19.00. Then note 'List price 20.00, 5% volume discount' in the notes or the item description. The total then matches what you expect to pay.

Published · 2 min read

Why there is no discount field

Quotations and invoices usually show a discount because the seller wants the customer to see the saving. A purchase order is your own order at the price you agreed. The net price after the discount is the agreed price, so showing it in the unit price column is enough.

The figures

You order 200 tote bags. The supplier's price is 20 riyals a bag, they agree to 5% off for the quantity, and their quote adds 15% tax. Compare what the Purchase-order generator works out both ways:

  • At the net 19.00: subtotal 3,800.00, tax 570.00, total 4,370.00 SAR.
  • If you forget the discount and enter 20.00: subtotal 4,000.00, tax 600.00, total 4,600.00 SAR.

The totals differ by 230.00. Send the order at the full price and the supplier may well invoice the higher amount, leaving you a week of emails to get your discount back.

Step by step

  1. Work out the net price. If the number is awkward, use the Discount calculator: enter the list price and the discount and it gives the price after it.
  2. In the item table, enter the description, then quantity 200, then unit price 19.
  3. Add to the description or notes: 'List price 20.00, 5% volume discount as per supplier quote Q-4410'.
  4. Enter the tax rate the supplier stated, if any, and create the file.

Cases to watch

  • A discount on the whole order rather than per item: if the supplier gives a fixed amount, say 100 off the order, either spread it across the items or enter the prices as they are, explain the discount in the notes and agree it in writing, because the tool will not subtract it from the total.
  • A net price with awkward decimals: 7% off 18.00 gives 16.74. The unit price takes plenty of decimals; only the line total is rounded to the smallest unit.
  • A discount for paying early: that is a payment term, not a price, so note it and enter the usual price.

Common questions

Is tax worked out before or after the discount?

Tax is calculated on the items plus shipping, and the items are at their net price here, so in practice it is after the discount.

Does the document show the list price in its own column?

No, the table has a single unit price. The list price appears only if you write it in the description or notes.