31/07/2025
With a bit of luck, as a self-employed entrepreneur you will sooner or later come across discounts on invoices. But did you know that there are different types of discounts, each of which must be handled differently in your VAT processing? In this blog post, we show you how to correctly record each type of discount in PIA Go!
A commercial discount is a direct reduction of the purchase amount on the invoice and is therefore easy to process. Did you manage to negotiate a nice 10% discount on a purchase of €1,000? Great! You simply pay €900 excluding VAT. The VAT is only calculated on the reduced amount.
How to record it
In PIA Go!, you can record a commercial discount quickly and easily. You simply enter the reduced amount of €900 as the purchase amount excluding VAT and select 21% as the VAT rate. Easy, right?
With a cash discount, also known as a payment discount, things work differently. An offer such as “2% discount if paid within 8 days” is a typical example of a cash discount. At first glance, the principle seems the same as with a commercial discount, but there is one important difference: VAT is always calculated as if you receive the discount—even if you pay later.
For an invoice of €1,000 with a 2% cash discount, VAT is therefore calculated on €980.
• If you pay within eight days, you record a purchase amount of €980 with €205.80 VAT in PIA Go!
• If you miss the deadline, you have two options: either record €1,000 excluding VAT and manually enter €205.80 as the VAT amount, or use the multi-VAT function and split the amount into €980 at 21% VAT and €20 at 0% VAT. PIA Go! supports both options, so the choice is yours!
Did you receive an invoice stating “Credit limitation of 2% if paid after 30 days”? This is essentially a reverse cash discount, as an additional amount is added if you pay later.
What remains the same: VAT is still calculated on the amount including the discount, regardless of when you pay. The registration in PIA Go! is therefore identical to that of a cash discount.
At PIA Go!, we believe that accounting does not have to be complicated. Our accounting solution combines the ease of a digital platform with the expertise of experienced accountants.
Received an invoice with a discount? You enter the amounts, and PIA Go! ensures your accounting is processed correctly. And if you still have a question, our experts are ready to assist you with tailored advice.
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How do I record a purchase invoice with a commercial discount in PIA Go!?
A commercial discount is a direct reduction of the invoice amount. For example, if you receive a 10% discount on a €1,000 purchase, you simply record €900 as the amount excluding VAT in PIA Go!. VAT is automatically calculated on this lower amount. Simple and correct.
What is the difference between a commercial discount and a cash discount?
A commercial discount is a permanent price reduction on the invoice. A cash discount (or payment discount) is a temporary reduction you receive if you pay quickly, for example within 8 days. The key difference: even if you pay late, VAT must still be calculated on the reduced amount as if you had paid on time. PIA Go! automatically takes this into account.
How do I correctly process a cash discount in my VAT return via PIA Go!?
For a cash discount, VAT must always be calculated on the reduced amount, even if you ultimately did not receive the discount. In PIA Go!, you have two options:
Record the full amount and manually adjust the VAT
Or split the invoice using the multi-VAT function: the discount portion at 0%, the remainder at 21%
Both methods are supported and ensure a correct VAT return.
What is a credit limitation on an invoice and how do I record it in PIA Go!?
A credit limitation works as a “reverse cash discount”: you pay more if you pay late. VAT is also always calculated on the lower amount, regardless of your payment timing. In PIA Go!, you process such an invoice in the same way as a cash discount to ensure everything is correct for your VAT return.
Can PIA Go! automatically process different types of discounts correctly?
Yes. Whether it concerns commercial discounts, payment discounts or credit limitations, PIA Go! supports every scenario. You enter the correct amount, and the system ensures that VAT is processed correctly. If you have any doubts, our accountants are ready to assist you with clear, tailored advice.
How do I know whether I received a commercial discount or a cash discount?
A commercial discount is usually shown as a reduced amount on the invoice itself (e.g. “10% discount granted”). A cash discount is often mentioned as a payment condition, such as “2% discount if paid within 8 days”. If in doubt, check whether the amount on the invoice is already reduced or whether the discount depends on early payment.
What happens if I do not use a cash discount in time?
If you pay late and lose the discount, you must still record VAT on the reduced amount. In PIA Go!, you can resolve this by manually adjusting the VAT or by recording the unused discount portion at 0% VAT. This ensures your VAT return remains correct, even if you missed the discount.
Can I combine multiple types of discounts in one entry in PIA Go!?
Yes, you can. If you receive a commercial discount and are also entitled to a cash discount, you can simply enter the reduced amount as the total and adjust the VAT manually or split it using the multi-VAT function. PIA Go! offers the flexibility to record this correctly.
What if the VAT amount on the invoice is incorrect due to a discount error?
First, check whether the incorrect amount is due to an incorrectly applied discount. If so, request a corrected invoice from your supplier. If you still need to record the incorrect invoice, manually enter the correct VAT amount in PIA Go! and attach the original invoice as supporting evidence—this keeps your accounting compliant.
How does PIA Go! help me when I am unsure about discounts and VAT processing?
If you are unsure how to correctly record an invoice with a discount, you do not have to solve it alone. PIA Go! provides clear input fields and warnings for unusual VAT treatments. And if you get stuck, your personal accountant is ready to help with tailored advice, in plain language.
