So, I own a Hair Salon and vendors will discount products and give points towards future purchases. this could be $10 or $20 off the total purchase amount. I don't want the value of our inventory affected by these discounts because when we sell the products we sell for what we normally would buy it for. How do I account for this? Is it considered income or Cost of Goods Sold? I don't create a bill when we place our orders, I wait until it clears the bank and then split the transaction into the proper categories. Example: We buy $200 in hair color and $100 in retail products and we are charged shipping of $5 for a total of $305. I would split the transaction like this, $200 Back Bar Inventory, $100 in Retail Inventory, and $5 Shipping cost. So if the vendor gives me a discount on anything I buy what is the best way to categorize it? I can not change the cost of the products because the value of our inventory would be off.
