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Do you need to track and manage various vendor discounts when you pay well? If so, you should see this post from Vendors on QuickBooks Online. If you have any questions, you can leave them in the comments section below. And I will try my best to help you and of course, if you think the post helped you I hope you like it. And remember to bookmark to get updates about new deals now and then. Discounts are generally not tracked by sellers. Separate account You can create one account for each type of Discount if required. You will receive and enter directly on the vendor’s Invoice as a discount. For example, imagine we have two types of values Good customer discount and now, in accounting, Early payment discount theory, Early payment discount Income for an account.
There is another type of because we got discounted revenue by paying early. But the good customer discount that we’ll list as an accounting type of account, and that’s because, in accounting theory, it’s the opposite of expenses vs But by putting these two different debit accounts into these two special categories, you’ll be able to see where they appear on the profit and loss statement. And you’ll be able to see the effect of each one so we’ll go down and click on Accounting and open up the Chart of Accounts then on the top right we’ll click on the New Now account type is Other Income and the detail type is Purchase Discount. Does not show. So the closest thing we can chew on is other miscellaneous income now should be the name. An early payment discount or early payment discount is OK if the seller.
Now we have to click on Save and New and this is because we will put another one as we mentioned the type of expenses and the category they use. You don’t have a discount. Here you could put something like let’s see what’s the closest it doesn’t matter if it’s going to have the same effect but I’d place the option near the detail type as other miscellaneous The price of services and that was because. There is an associated expense and we’re going to call this the Good Customer Discount. The sellers are OK now. We can click save and close to see that both accounts are done.
Add them to the chart of accounts, scroll down to confirm they’re there, and now we’ll do our example. Let’s imagine we have Verizon invoice number seven six four hundred and forty dollars for a phone. The bill is received and they deduct fifty dollars for a nice discount for the customer. And for any reason, we track that debit separately and see how to record it. It’s very easy. Click on the plus sign for new transactions. Go to the Seller column and click Invoice Now; the seller is Verizon. The Invoice is for phone charges and the bill amount is in the actual phone charges amount. That we spent six hundred and fifty dollars on the service, but we have to reduce the bill by the amount of the good Discount to the customer, so the good Discount to the customer is the Discount to the sellers that we recently gave, and we know This is a $50 receipt reduction, so we put a minus sign and then type 50.
And this will reduce the total bill here to $600, which will help us track the amount of phone service that we used, which was six hundred and fifty dollars, and follow the Discount. What they give us separately is the bill that needs to be paid and saved and closed. And if we go back to the trial balance, you can see that the customer’s good Discount for sellers first shows up as a $50 credit. Now we have to confirm that the phone charges when we double-click on it. The real bill and phone charge added up to six hundred and fifty dollars because this is actually the service money we receive for the early payment discount it only takes when the Invoice is paid to the person who records the payment of the Invoice. The terms on the Invoice should be compared with the date of payment and determine whether the Discount is still available. If the Discount is available, the person making the payment should re-open the Invoice and calculate it. Enter the discount amount itself and then the Invoice the way we entered the second Discount for a moment and then they are gone.
And record the invoice payment, so let’s imagine you’ve received our supplies from Staples invoice number six one four $850. The correct terms are two ten net thirty, which comes from the drop-down if you watch the previous video. As you know, if we pay within ten days of April 18th, we will get a 2% discount. If not, we have to pay the full amount in 30 days, so by recording the payment of the bill, First, let’s go ahead and click On to register this Invoice. This will be a great offer for you.