My company gives out promotional gifts every week as rewards and incentives. How do I map this liability & expense in the daily sales journal entry?

Hey, Info2154. We can create a journal entry for the accounts that can be affected when your customers redeem these promotional gift cards and translate the amounts involved to the promotional expense account. However, since this also involves selecting the correct accounts for your daily sales journal entry, it's best to collaborate with your accountant. 

First off, since this involves the accurate selection of accounts for recording the transactions correctly, it’s important to ensure that everything aligns with standard accounting practices tailored to your specific business context. Therefore, I recommend consulting with a professional accountant who can provide guidance tailored to your business's needs. If you do not currently have an accountant, or looking for specialized advice, our QuickBooks ProAdvisor service is incredibly helpful. 

On the Other hand, I can offer some general guidance on the accounts typically affected when customers redeem promotional gift cards. Follow these steps to write off inventory items given as promotional samples:

1. Select + New.
2. Select Journal entry.
3. Enter the date.

On the first line:

1. Under Account, select Sales of Product Income.
2. Under Debits, enter the amount you are writing off.
3. Under Description and Memo, type something like "To write off Promotional Sample Invoice # - [insert client name]".

On the second line:

1. Under Account, select Cost of Goods Sold.
2. Under Credits, enter the amount that the Cost of Goods are for this product.
3. The Memo field should auto-populate.
4. Under Name, select the customer name.

On the third line:

1. Under Account, select Accounts Receivable.
2. Under Credits, enter the same amount as the write-off.
3. The Memo field should auto-populate.
4. Under Name, select the customer name.

On the fourth line:

1. Under Account, select Promotional/Samples.
2. The Debits amount should auto-populate.
3. The Memo field should auto-populate.
4. Under Name, select the customer name.
5. Select Save.

I'm also pleased to inform you that you can elevate your financial management with the help of our QuickBooks Live Expert Assisted team. They specialize in helping you transform your financial management and provide personalized advice for your business's specific demands.

Furthermore, if you'd like to record your total daily sales without the use of a Journal Entry, you can refer to this helpful article as a future reference: Record your total daily sales. 

Please feel welcome to return to this thread if more queries come up about entering journal entries. We'll be available around the clock to assist you further. 

@info2154 

There is no expense when you give out a promotional gift card.  That's a common misconception.  If you record it as an expense and also discount the sale when the customer redeems the card, you will double-count the expense - once as an expense when the card is issued and a second time when you discount the sale.  And, you'll be stuck with a liability entry you can't clear.

If you want to record this in QB, the promo cards should be recorded as both a liability and a contra-liability.  Or, leave them out of your books altogether and track them separately.

https://www.claconnect.com/en/resources/blogs/are-your-restaurants-promo-cards-being-accounted-for-properly