How to Customize Discount Rates in Zoho Books

Offering discounts is one of the most effective ways to attract new customers, reward loyal clients, and increase sales volumes. Whether you’re running a limited-time promotion, offering volume-based discounts, or giving customer-specific price breaks, the ability to apply and control discount rates is essential to any accounting or invoicing system.

Zoho Books, a leading cloud-based accounting platform, offers a flexible and easy-to-use discounting system. With Zoho Books, businesses can apply item-level or invoice-level discounts, configure customer-specific discount rules, and customize how discounts are shown in transaction templates.

If you’re looking to get started or expand your knowledge of how to customize discount rates in Zoho Books, this guide walks you through everything you need to know,  from enabling discounts to best practices in applying them across different business scenarios.

Understanding the Discount System in Zoho Books

Zoho Books provides two main types of discount applications:

1. Item-Level Discounts: Discounts are applied individually to each product or service line item in an invoice or sales order.
2. Invoice-Level Discounts: A single discount is applied to the subtotal of the entire transaction.

You can use one of these options at a time, depending on how you’ve configured your system. Choosing the right discount method depends on your pricing structure, promotional campaigns, or customer agreements.

Step 1: Enabling Discounts in Zoho Books

Before you can apply or customize discounts, you need to ensure the discount feature is turned on in your organization’s settings.

To enable discounts:

1. Log in to your Zoho Books account.
2. Navigate to the Settings section (typically represented by a gear icon).
3. Go to Preferences, and select Invoices or another applicable module (e.g., Estimates, Sales Orders).
4. Under the “General” section of the invoice preferences, locate the Discount field settings.
5. You will see options like:
   • Don’t show discount
   • Show discount per item
   • Show discount as an invoice-level field
6. Choose the appropriate option based on your discount strategy and save the changes.

Once enabled, the discount field will become visible in all applicable transaction forms like invoices, sales orders, and estimates.

Step 2: Applying Item-Level Discounts

Item-level discounts are useful when different products or services need different discount rates. For example, you may want to offer a 10% discount on product A and a 15% discount on product B in the same invoice.

To apply item-level discounts:

1. Create a new invoice or sales order.
2. Add your products or services to the transaction.
3. In the line item fields, you’ll now see a column for Discount (%) or Discount Amount, depending on your settings.
4. Enter the desired discount for each line.
5. Zoho Books will automatically recalculate the total based on the discount applied to each item.

This feature is especially beneficial when you run product-specific promotions or want to reward customers buying certain items.

Step 3: Applying Invoice-Level Discounts

Invoice-level discounts are ideal when you want to offer a flat discount on the entire transaction, regardless of the individual product pricing.

This method is commonly used for:

• Seasonal sales
• Loyalty rewards
• Limited-time offers

To apply invoice-level discounts:

1. Open a new invoice or sales order.
2. Add the necessary items.
3. At the bottom of the invoice (below the subtotal), you will see a field labeled Discount.
4. Enter the discount as either a fixed amount or a percentage, depending on your configuration.
5. The system will apply the discount to the entire invoice subtotal.

This approach simplifies discounting for transactions where a uniform reduction is offered across all items.

Step 4: Configuring Discount Format and Type

Zoho Books allows you to customize how discounts are entered—either as percentage-based or fixed amount discounts. You can also choose whether this applies per item or to the entire invoice.

To change how discounts are applied:

1. Go to Settings > Preferences > Invoices.
2. Under the Discounts section, select:
   • Percentage: Allows you to enter a value like “10%”.
   • Amount: Lets you enter a dollar or currency value directly.
3. Choose whether this should apply to individual items or at the total invoice level.
4. Save your preferences.

Customizing discount formats lets you align your invoicing system with your sales strategy and customer expectations. For example, retail businesses often use percentage discounts, while service providers may prefer flat-rate reductions.

Step 5: Setting Customer-Specific Discount Rates

Zoho Books offers another powerful customization feature: customer-specific pricing. You can define discount rates that apply automatically when creating transactions for a specific customer.

To set up a customer-specific discount:

1. Navigate to the Customers module.
2. Select a customer or create a new one.
3. In the customer profile, look for the Price List or Custom Field section depending on your plan and preferences.
4. Assign a price list or define a discount using custom fields or notes.
5. Save the changes.

When you create an invoice for this customer, the defined discount will apply automatically based on the pricing setup or manual entry.  Although Zoho Books does not have a native “discount tier” system built into every plan, using price lists and custom fields can simulate this functionality effectively.

Step 6: Customizing Invoice Templates to Show Discounts

Displaying discounts clearly on customer-facing documents like invoices or sales orders is crucial for transparency and professionalism.

To ensure discount information is visible on your invoices:

1. Go to Settings > Templates > Invoices.
2. Choose the invoice template you’re using.
3. Click Edit to customize the layout.
4. Navigate to the Item Table section to manage columns.
5. Ensure that the Discount column is enabled.
6. You can also customize the Total section to display invoice-level discount values.
7. Preview the changes and save your template.

This ensures that your customers see the breakdown of prices and discounts, which can reduce disputes or confusion during billing.

Step 7: Reporting on Discounts

To understand the financial impact of the discounts you’ve offered, Zoho Books provides built-in reporting features that help you track total discounts by:

• Customer
• Product
• Invoice
• Time period

To generate reports involving discounts:

1. Go to the Reports module.
2. Choose reports such as Sales by Item, Customer Balances, or Sales by Customer.
3. Use the filters to focus on invoices or time periods with discounts applied.
4. Export or analyze the data as needed.

This insight helps you evaluate whether your discounting strategies are boosting revenue or eroding profits.

Best Practices for Managing Discounts in Zoho Books

Implementing discounts successfully goes beyond applying percentages. Here are a few best practices to consider:

Standardize Your Discount Policy

Make sure all team members understand when and how discounts should be applied. Use naming conventions in customer notes or custom fields for easy reference.

Avoid Over-Discounting

While discounts can drive sales, offering too many or overly large discounts may cut into your margins. Review reports regularly to ensure they’re helping, not hurting.

Audit Templates for Clarity

Ensure all transaction templates clearly show the discount details. This helps with client communication and protects you from misunderstandings.

Use Automation When Possible

Use workflows or third-party integrations to automate discounts for specific scenarios such as first-time buyers or high-volume purchases.

Segment Your Customers

Assign different discount strategies to different customer groups, such as resellers, wholesalers, or repeat clients.

Common Mistakes

Even with a robust tool like Zoho Books, there are a few pitfalls to watch out for when customizing and applying discount rates:

• Not showing the discount in the invoice: This creates confusion and can lead to disputes.
• Applying both item-level and invoice-level discounts simultaneously: Zoho only supports one method at a time—be sure to choose the right one based on your needs.
• Failing to update preferences after promotions end: Always reset or review settings once a campaign concludes.
• Using inconsistent discount formats: Mixing percentages and fixed amounts without clarity can lead to internal errors and customer misunderstandings.
• Not reviewing impact on profitability: Regularly assess how discounts are affecting your bottom line.

Customizing and applying discount rates in Zoho Books is a powerful feature that allows businesses to operate flexibly, competitively, and professionally. Whether you are running a retail operation, service-based business, or wholesale company, Zoho Books provides you with the tools to control, track, and display discounts across your financial documents.

From setting item-level discounts and applying customer-specific price lists to configuring invoice layouts and running reports, the platform allows complete customization based on your business needs.  By implementing the strategies and steps outlined in this guide, you can ensure your discount policies are both effective and accurately reflected in your accounting records—ultimately contributing to better client relationships and improved revenue management.