Discount

What is a discount?

A discount reduces the amount a client pays from your standard rate. It can be a percentage off the total, a fixed dollar amount, or a reduced rate for specific circumstances. When used strategically, discounts can improve cash flow, win competitive bids, and build long-term client relationships.

For contractors and service providers, discounts are a business tool—not a requirement. Knowing when to offer them (and when not to) protects your profitability.

Common types of discounts

Discounts typically fall into a few categories:

• Early payment discount — A percentage off for paying before the due date (e.g., "2/10 Net 30" means 2% off if paid within 10 days)
• Volume discount — Reduced rates for larger projects or repeat business
• Seasonal discount — Lower prices during slow periods to keep work flowing
• Referral discount — Reduced rate when a client refers new business

Showing discounts on invoices

Always show the original price, then the discount as a separate line item, then the adjusted total. This makes the value of the discount visible to the client and keeps your records clear for accounting purposes.