This guide outlines the standard practice for recording discounts when ordering products and applying pay-on-time discounts via a supplier portal. 

• Purchase discounts are entered on the Purchase Order in LightSpeed before it syncs as a bill in Xero.
• Pay-on-time discounts can be applied in Xero either as an adjustment during reconciliation or as a credit note on the supplier record in Xero. 

Appling Discounts on Purchase Orders in Lightspeed

1. Create the Purchase Order in Lightspeed as per your normal process.
2. At the bottom of the PO screen, navigate to the Discount Line. 
3. Select whether the discount is a dollar or % value.
4. Enter the discount amount in the field provided. 
5. Click Save.
6. Once products are received, Receive the PO and send it to Xero. 
7. The bill created in Xero should reflect the discounted amount.

Appling pay-on-time discounts in Xero

You can apply the pay-on-time discount either by:

1. Applying the discount as an adjustment during bank reconciliation, or
2. Creating a credit note on the supplier and applying it to the related bill(s).

Apply discount as an Adjustment during bank reconciliation

1. Pay the bills as per your normal process in the Supplier Portal.
2. In Xero, locate the bank statement line for the amount you paid to the Supplier. 
3. On the right-hand side, click 'Find and match' 
4. In Section 1, find and select the bills you paid
5. In Section 2, ensure the bills selected match what you paid via the portal.
6. In Section 3, click the 'Adjustments' dropdown and select Bank Fee. Fill the transaction as follows:
   • Contact: Supplier
   • Description: Enter an appropriate description for audit purposes e.g 1% supplier portal discount
   • Account: Select 5000-300 COGS Discount Taken
   • Amount: Enter the dollar amount of the discount.
7. The total of the bills selected and the bank fee transaction should match the amount paid. 
8. Click Reconcile.

Create a credit note on the supplier and apply it

1. Pay the bills as per your normal process in the Supplier Portal.
2. In Xero, navigate to the supplier record.
3. On the top right-hand side, click New and select Bill Credit Note.
4. Enter the credit note details:
   • From: Auto-populates to the Supplier
   • Date: Date discount was given
   • Reference & Description: Enter an appropriate description for audit purposes e.g 1% supplier portal discount 
   • Account5000-300 COGS Discount Taken
   • Amount: Enter the dollar amount of the discount.
5. Click Approve to proceed to the 'Allocate Credit Balance page'.
6. Apply the credit balance to the related bill(s) and click Allocate Credit.
7. Reconcile the bill(s) against the related statement line using the Find and Match feature.