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MDCahill
March 22, 2021
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Vendor early payment discounts

  • March 22, 2021
  • 1 reply
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We are a wholesale distributor for pipe, valves and fittings.  Some of our vendors offer a 2% 10 Net 30 for early payment.  An example is tube fittings purchased from a vendor that offers 2% 10 Net 30 days.  The invoice will be for $10,000 for a 15 line purchase order with varying quantities on each line.  

 

I have started taking advantage of the discount but noticed that the discount taken at time of payment is falling into an account that is incorrect.  I was going to change it but then I started questioning if the discount should be recorded under COGS or other income.   Any insight would be appreciated. 

 

Thanks in advance!

 

 

Best answer by ShiellaGraceA

Thanks for coming by, @MDCahill.

 

I have some information about how discounts should be recorded in QuickBooks. Since the discount is applied when paying the bills, you'll want to record it as income. There will be a price reduction instead of adding to the cost. However, I'd still recommend consulting with an accountant to make sure your books are accurate.

 

To do this:

 

  1. Go to the Vendors menu. Then, select Pay Bills.
  2. Choose the vendor bill. Then, tap the Set Discount button.
  3. Enter the Amount of Discount. Pick the Discount Account. See the image below.
  4. You can click Add New if the income account is not yet listed.
  5. Click Done. Then, Pay Selected Bills.

 

 

Check out this guide for more information about paying bills: Pay bills in QuickBooks Desktop.

 

If you need help with other tasks in QBDT, feel free to browse this link here to go to our general topics with articles. Just look for responses that suit your concern.

 

Don't hesitate to leave a comment below if you still have questions or concerns with vendor. I'm always here for you. Take care and have a nice day ahead.

1 reply

S
ShiellaGraceAAnswer
March 23, 2021

Thanks for coming by, @MDCahill.

 

I have some information about how discounts should be recorded in QuickBooks. Since the discount is applied when paying the bills, you'll want to record it as income. There will be a price reduction instead of adding to the cost. However, I'd still recommend consulting with an accountant to make sure your books are accurate.

 

To do this:

 

  1. Go to the Vendors menu. Then, select Pay Bills.
  2. Choose the vendor bill. Then, tap the Set Discount button.
  3. Enter the Amount of Discount. Pick the Discount Account. See the image below.
  4. You can click Add New if the income account is not yet listed.
  5. Click Done. Then, Pay Selected Bills.

 

 

Check out this guide for more information about paying bills: Pay bills in QuickBooks Desktop.

 

If you need help with other tasks in QBDT, feel free to browse this link here to go to our general topics with articles. Just look for responses that suit your concern.

 

Don't hesitate to leave a comment below if you still have questions or concerns with vendor. I'm always here for you. Take care and have a nice day ahead.

L
Lia O
December 9, 2021

Can I change vender name on a closed Purchase Order?

R
RCV
December 9, 2021

I've got some steps on how to change the vendor name on your closed purchase order, Lia O,

 

We can go to the Vendor Center and edit the transaction to another vendor name. Let me show you how: 

  1. Go to Vendors on the top menu.
  2. Choose Vendor Center. 
  3. Click the Transactions tab. 
  4. Select Purchase Orders.
  5. Tap the Filter Type field and choose All Purchase Order. 
  6. In the purchase order's lists, double-click the transaction.
  7. Select a name in the Vendor drop-down field.
  8. Hit Save & Close.
  9. Press Yes to confirm.

 

Here's an article you can refer to for more details about creating purchase orders in QuickBooks Desktop.  To run all closed/open purchase order transactions, just follow the steps below:

  1. Go to Vendors on the top menu.
  2. Choose Vendor Center. 
  3. Click the Transactions tab. 
  4. Select Purchase Orders.
  5. Tap the Filter Type field and choose All Purchase Order. 
  6. Tick the Run Reports drop-down and choose View as a Report.

 

Feel free to visit our Expenses and vendors page for more insight about managing your vendor transactions. 

 

I'd like to know how you get on after trying the steps as I want to ensure this is resolved for you. Just reply to this post and I'll get back to you. You have a good one. 

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