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FayOh
December 11, 2018
Solved

Correct way to enter a Discount on a Vendor Bill.

  • December 11, 2018
  • 4 replies
  • 0 views

From one of our vendors, some of the bills are eligible for a percentage discount. 

What is the correct way of entering this discount. 

On the bill?  At time of payment? 

Does this get marked as an Income account or Expense Account ?

Thank you. 

Best answer by Rustler

It depends

If this is an early payment discount, then the intuit response is correct. early payment like in the terms 2/10/net 30, and you use an income account for the amount of the discount

If this is a purchase discount, then No, there is no discount entered at all.  You enter the actual price paid <per the IRS

4 replies

Rustler
RustlerAnswer
December 11, 2018

It depends

If this is an early payment discount, then the intuit response is correct. early payment like in the terms 2/10/net 30, and you use an income account for the amount of the discount

If this is a purchase discount, then No, there is no discount entered at all.  You enter the actual price paid <per the IRS

    john-pero
    john-pero
    December 11, 2018
    It may or may not be "per IRS" but if you do not enter the bill but only cut the check then early payment terms would be disregarded other than what you pay is what you expense (cash basis) I would think.
    M
    MichelleT
    December 11, 2018

    Hi there faigy,

    I'm glad you join the Intuit Community.

    All you need to do is apply the discount when paying the vendor bills. This gets marked as an income since there is a price reduction instead of adding cost to the business.

    Let me show you how to do this.

    1. Go to the Vendors menu. 
    2. Select Pay Bills.
    3. Select the vendor bill. 
    4. Click the Set Discount button.
    5. Enter the Amount of Discount.
    6. Select the Discount Account.
    7. You can click Add New if the income account is not yet listed.
    8. Click Done.
    9. Click Pay Selected Bills.

    You can refer to the screenshots that I've attached.

    Just leave me a comment below if you have further questions with discounts and bills - I'm here to help.

      Rustler
      Rustler
      December 11, 2018
      You need to qualify when this procedure is used, it is not a blanket type thing of always do this
      and the account for select an account (which is really NO help at all when answering a question) is income
        S
        Stay Up
        April 2, 2020

        I have a related question.  How do I enter a discount on a check or credit card purchase.  We buy everything online, payment at checkout.  No Bill.  I have been using Contra-income account but it doesn't make sense to me because it's an income account and I have to enter the amount as a negative in the check/credit card purchase for it to reflect as a decrease in the amount owed but if it's an income account that account will also deduct the amount from income instead of counting it as income.

        Michael K
        Michael K
        April 2, 2020

        Hey there, @Stay Up. Thanks for joining the thread. 

         

        Since every business is different, I recommend touching base with your accountant  to see what works best for your specific use-case.

         

        Let me know if you have any other questions and I'll be happy to help out. Have a good one!

        D
        David_Lyash
        June 12, 2021

        I think it's ridiculous that QBO offers "3% 10 NET 30" as terms for vendors without the ability to automatically apply the discount if conditions are met. I used to have that feature in Quickbooks Desktop pro but not in QBO Advance. I am indignant as a consumer of their product. QBO advertises itself as a platform which automates most processes yet switching from QBD to QBO just adds layers of work on many things, especially when it comes to AP.
        Going back to discounts on bills, sometimes I may have 100s of bills to which I need to apply a 3% discount. Btw, VERY common with a lot of vendors. It would take me less than a minute to apply the discount in Desktop Pro version. However, It would take me about an hour to enter 100s of credits against bills just to apply a 3% discount in QBO.

        @books11249, customers are requesting that you add this feature asap. People have been writing about it for years and to no avail. It's about time someone pays attention up there. Please fix asap!

          Rose-A
          Rose-A
          June 12, 2021

          It is always our aim to develop relevant features that came from customer's feedback, David_Lyash.

           

          I know how important it is to automatically apply a discount to vendor bills in QuickBooks Desktop. However, this option is currently unavailable.

           

          I can pass along all the feedback you have to the appropriate channels so you're able to reach a point of resolution as quickly as possible. Also, you can submit your feedback to make the program better by going to the Send Feedback Online on your QuickBooks Desktop.

           

           

          In the meantime, I'd suggest visiting the What's New section on your QuickBooks Desktop, to stay informed with our latest news and updates including product improvements.
           

           

          Additionally, you may want to bookmark this link: Resource Hub. This will provide you with resources and videos about managing your QuickBooks Desktop account, income, expenses, inventory, and running reports.

           

          I'm always here to help if you have any other concerns or anything in QuickBooks. I'll make sure to get back to you as quickly as I can. Have a good one.

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