About Discounts

This document provides a detailed look at discounts within gaiia, how they work, and how to set them up.

What are Discounts?

Discounts are a credit applied to an account or at invoice generation. They can be used immediately to reduce the amount on an invoice or added to an account's "Available Funds" for future use.

Types of Discounts

Within gaiia, there are three types of discounts: one-time, recurring, and automated discounts. They generally differ in their frequency of application.

One-time discounts

• Added using the Discount account option from the Transactions area of an account.
• Can be applied to multiple invoices (if the amount is large enough).
• Work almost like a payment when added to an invoice.
• Increase the "Available funds" of an account (unless immediately used).
• The value of the discount is determined at the time of application by a user.

Recurring discounts

• Added to an account as a subscription.
• Only applied each time a recurring invoice is generated.
• Applied only to the recurring invoice.
• Can be a flat dollar amount or a percentage of the invoice subtotal (before taxes).
• Generally always a "fixed" amount, defined within the product catalog (e.g., always $5 off or 10%).

Automated discounts

• Automatically created by gaiia.
• Work very similarly to one-time discounts in their application.
• Only apply when:
  • Proration is required in the event of things like cancellations, subscriptions being added mid-cycle, etc.
  • When invoices are write-offs are being done

How to Apply One-Time Discounts

Please Note: One-time discounts do not create any discount through the product catalog. They simply add a one-time credit to an account based on a subscription, product, or custom amount.

To apply a one-time discount, use the Discount account option within the Transactions area of an account. This will present three different options to decide on how to add the discount. These options provide mechanisms to help create the discount.

Subscription Discounts

A subscription discount will create a discount based on any of the current subscriptions on an account. A subscription must exist on the account to create a discount based on it.

When building this discount, there are a few different fields available:

• Reason - Used to track the reason for the discount. A list of available options is presented to the user, and the reason helps audit and report on why discounts occurred.
• Subscription to discount - The subscription that the discount will be based on. The subscription must be on the account (in any status) to appear in the drop-down.
• Discounted amount
  • By duration - Will create a discount based on a defined calendar period. For example, a period could be specified for the end of the month, and gaiia will automatically calculate the discount amount based on the date range and subscription amount. The period can only be within the current billing cycle.
  • By amount or percentage - The discount is created based on a certain percentage or dollar amount specified. Regardless of the method, the resulting discount amount cannot exceed the recurring subscription amount on the account.

Product Discounts

A product discount will create a discount based on any products created within the product catalog. There are always a specific set of fields when applying this discount:

• Reason - Used to track the reason for the discount. A list of available options is presented to the user, and the reason helps audit and report on why discounts occurred.
• Product - Displays a list of all the products configured within the product catalog and used to base the discount on.
• Amount - How much the discount will be. An amount or percentage can be used to define it. Regardless of the method, the resulting discount amount cannot exceed the product price defined within the product catalog.

Custom Discounts

As the name suggests, a custom discount is a customized discount not based on any subscription or product within gaiia. Like the other discounts, a standard set of fields are always available for the user when applying the discount.

• Reason - Used to track the reason for the discount. A list of available options is presented to the user, and the reason helps audit and report on why discounts occurred.
• Internal note - Allows a note to be tracked on the discount transaction on the account for internal reference and reporting.
• Invoice description - Allows a user to specify the copy that will appear on the invoice when the discount is applied.
• Amount - The overall dollar value of the discount. Must be a minimum of $0.01.
• Quantity - Defines how many times the discount is applied to the account. Always defaults to 1.
• This transaction is taxable - Determines whether tax should be calculated on the discount amount entered and included in the overall value applied to the account.

Pro Tip: A limit can be set to restrict the maximum value a custom discount can be. This is set by the "Maximum custom discount amount" billing setting found under the "Other settings" category.

How One-Time Discounts are Applied to Invoices

One-time discounts, as discussed earlier, are essentially a credit applied to any invoice. Therefore, they work like a payment applying to the overall invoice total and appear in the same area on the invoice.

The discount will also affect the tax when it is built into the discount itself. This is done by taking a $10 discount and including the appropriate tax value as part of the overall discount amount. For example, a $10 discount with a 5% tax would become $10.50.

How to Apply Recurring Discounts

Recurring discounts work like a subscription on an account which is automatically applied to a recurring invoice each time it is generated. Therefore, like subscriptions for internet services, they must be assigned to the account first through the Subscriptions area.

While this should be avoided for recurring debits, the + Subscriptions button is the primary way to add a recurring discount.

When the appropriate button is clicked, a "Recurring discount" modal will appear allowing one to be assigned. This modal will contain a few different fields:

• Product - The discount that will be applied to the account. Both percentage and dollar discounts configured within the product catalog will appear.
• Reason - Used to track the reason for the discount within reporting and auditing. Currently, only the "Promotion" reason can be assigned (although this will be changed in the future).
• Create prorated discount - Depending on when the discount is added, it can often fall during a billing cycle. Selecting this checkbox will ensure a prorated credit for the discount amount will be applied for the current billing cycle. This will only be available if a dollar discount was selected from the "Product" drop-down.
• Share payment with other accounts - If the discount will be split across accounts, select this checkbox. A similar interface as when sharing a subscription will appear to allow for the split to be specified. This will only be available if a dollar discount was selected from the "Product" drop-down.

Configuring Discounts

Discounts are configured directly within the product catalog, like you would a product or fee. Use the navigation on the left to select the + Discount option.

When configuring a discount, many of the same fields are present when configuring a product or fee. The fields have been explained below:

• Name - The name of the discount. Keep in mind, this is what will appear to your customers as well, unless overwritten in translations.
• Slug - Only appears in reporting and the product catalog. A unique id that is created to help identify the discount.
• Description - Used for internal identification only. Allows you to provide a brief summary of the discount and what it is used for.
• Payment strategy - Keep as recurring. This will allow it to be applied to a recurring invoice.
• Type - Specifies whether the discount being created is a dollar or percentage one.
• Currency - This only applies if you support multiple currencies. This drop-down will specify which currency the discount is for.
• Price/Percentage - If configuring a dollar discount, the total dollar value of the discount. If configuring a percentage discount, enter the percentage of the discount in this field.
• Charge Tax - Whether the discount should also apply to tax collected on an invoice. For percentage discounts, this toggle does not affect it, and they only apply to the subtotal of an invoice.
• Recurrence Limit - Will limit how many times it is applied to an invoice before expiring. Discussed in more detail in this article: Creating and Using Expiring Subscriptions.

Once the main details of the discount have been defined, select one or more coverage areas it belongs to.

Lastly, select the category it belongs to as well.

Please Note: Like products and fees, restrictions are imposed on editing key details of it such as the amount. Should updates be required, a new product version can be created. This new version will only affect new customers receiving the discount.

How Recurring Discounts are Applied to Invoices

Recurring discounts, since they are also being applied to an invoice, always affect the subtotal before any taxes or other payments have been applied. This applies to both types of recurring discounts: dollar and percentage.

Expiring Discounts

Recurring discounts can also be set up to expire. A detailed article walks through how they work and are set up. It can be found by accessing this link: Creating and Using Expiring Subscriptions.

Tracking Discounts in Reporting

The "Discounts Applied" report will be the primary report used to track any discounts that were applied. It provides details on every discount applied to an invoice. Paired with the "Invoiced Revenue" report, it can provide a complete picture of all discounts that occurred within a particular time frame and how they affected invoices.

Tracking Discounts in Snowflake

The relevant tables to track discounts within Snowflake include:

• TRANSACTION (filtered by the "DISCOUNT" transaction type)
• INVOICE
• DISCOUNT