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cchills
January 10, 2022
Question

How do I get discounts to show in Income on P/L?

  • January 10, 2022
  • 1 reply
  • 0 views
I turned on discounts in Account Settings. The discount account was not created, which the documentation said should happen. I created a discount account and used a discount percent on an invoice. It appears the system didn't use the account I created. The only way I can see the discount amount is to run the P/L in Accrual mode and it shows up buried in the Miscellaneous Income line as negative income. If I run the report in Accrual mode by Class, it shows up in the Not Specified class. This can't possibly be how discounts are supposed to work in Quickbooks, can it?

1 reply

M
MirriamM
January 10, 2022

Hi there, @cchills.

 

Once the Discount feature activates in your QuickBooks Online (QBO) account, QuickBooks automatically creates a discount account on your register. To verify the discount account that goes when you turned on the discount feature, here's what you'll need to do:

  1. Click the Gear icon at the top.
  2. Select Account and settings.
  3. In the left menu, click Advanced.
  4. Go to the Chart of accounts section.
  5. See the account selected for the Discount account field.

 

Also, when running a report, there are two types of accounting methods in QuickBooks Online. These are Accrual Basis and Cash Basis. 

 

Accrual basis

  • In this accounting method, the time when you enter a transaction and the time when you actually pay or receive cash may be two separate events.
  • An accrual basis report shows income regardless of whether your customers have paid your invoices and expenses regardless of whether you have paid all your bills.

Cash basis

  • A bookkeeping method in which you regard income or expenses as occurring at the time you actually receive a payment or pay a bill.
  • A cash basis report only shows income if you have received cash and expenses if you have paid cash.

 

Given the information above, you can now select which accounting method works best with your business. Additionally, depending on how you set up the discount item, the discount item should be included in your Profit and Loss Report. Usually, it is displayed right below the Other Income section.

 

You can also visit this guide about adding discounts to invoices in QBO: Add a discount to an invoice or sales receipt in QuickBooks Online.

 

Let me know if you have questions by leaving a comment below. I'll get back to you. Take care and have a great day.

C
cchillsAuthor
January 10, 2022

I'm not new to Quickbooks and I did read the online documentation before working with Discounts on Invoices.

 

I'm saying that the Discount account was NOT created when I turned on Discounts.  I looked, its NOT there. It was NOT created.

 

I do know the difference between Cash and Accrual basis.  The only way we're seeing the discount we put on these invoices is if we use the Accrual basis and its showing up in Miscellaneous Income.  Its NOT showing up in a Discount account, its NOT showing up in Other Income.

 

Its NOT working in our system.  I tried calling support on Friday, but got a support tech who had to keep putting me on hold to ask someone else questions.  She also kept telling me how it should work and in screen sharing I showed her that it was not working that way in our system.  The last time she put me on hold I gave up after 30 minutes.

M
mv32
January 10, 2022

I can see what you've been dealing with to get this far, @cchills.

 

Once you turn on discounts in QuickBooks, the discounted sale or item will allocate the amount into its default Discount given account. You're correct that this will touch income accounts.

 

Furthermore, you'll want to check the transaction journal in the invoice or sales receipt to view what account discounts show up. From there, you'll see the amounts will indicate the account where it is tracked. In that manner, you'll know why this is posting to a different account.

 

Here's how:

 

  1. Go to Sales and then select a transaction in the All Sales tab.
  2. Select the transaction in question (it can be invoice, credit memo, or sales receipt).
  3. Click More.
  4. Select Transaction Journal.
  5. Check the account for that specific amount.

 

Also, if you added discounts as service items in invoices, you can change the income account to where you want discounts to be tracked by following these steps:

 

  1. Click the Settings icon on the top right.
  2. Select Products and Services.
  3. Find the item in question and tap Edit on the Action column.
  4. In the Income account drop-down, select Other income or Add new.
  5. Click Save and close.

 

On the other hand, this shows up in the unspecified class when the discount item has no class assigned. To correct this, edit this item by following the steps above and then add its class.

 

However, if the discount amount still set in the Miscellaneous Income account, I'd suggest contacting our Care Support team one more time. They'll have the tools to look at this and report this to our engineering team to be fixed.

 

I've added some articles for you to look up to about this topic:

 

Change the account for a product/service item.

Add a discount to an invoice or sales receipt in QuickBooks Online.

 

I'm looking forward to seeing your updates here. If you have other questions in mind, please let us know to clear them up for you. Have a bountiful day ahead!

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