How to Pass Discount Entries in Tally Prime: Trade Discount vs Cash Discount SOP
How to Pass Discount Entries in Tally Prime: Trade Discount vs Cash Discount SOP
Learn the accounting differences between Trade Discounts and Cash Discounts in Tally Prime. Configure invoice discount columns and record ledger entries accurately.
Who is this for: Tally Prime SOPs
In commercial accounting, **Trade Discounts** and **Cash Discounts** serve completely different purposes. Trade discounts are granted at the time of purchase or sale to encourage bulk orders and reduce the item invoice price directly. Cash discounts are granted during payment settlement to incentivize prompt payment. This SOP details how to record both discount types in Tally Prime.
Quick Answer: How to Record Trade vs Cash Discounts in Tally Prime?
Trade Discounts are deducted directly from the item invoice value (enable 'Use Discount column in invoices' in F11). Cash Discounts are recorded separately as ledger entries (Discount Allowed under Indirect Expenses or Discount Received under Indirect Incomes) in Payment or Receipt vouchers.
- Trade Discount: Deducted directly on the invoice (F11 > Use Discount column).
- Cash Discount: Booked as a separate ledger in Payment (F5) or Receipt (F6) vouchers.
- TrulyInvoice automatically extracts trade discounts from vendor PDFs during purchase sync.
1. Recording Trade Discounts on Invoices
- Press
F11 (Features)in Tally Prime. - Set Use Discount column in invoices to Yes.
- In Sales (F8) or Purchase (F9) vouchers, enter the discount percentage in the dedicated % Discount column. Tally deducts the discount before tax calculation.
2. Recording Cash Discounts During Payment Settlement
- Create ledgers: Discount Allowed (Indirect Expenses) or Discount Received (Indirect Incomes).
- Open Payment (F5) or Receipt (F6) voucher.
- Enter the party payment amount and add the Discount ledger line item to balance the bill settlement.
3. Auto-Extract Supplier Discounts with TrulyInvoice
TrulyInvoice parses trade discounts and net unit prices from supplier PDFs, posting clean F9 purchase vouchers to Tally Prime in 15 seconds.
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