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powerandenergy
Level 1

Cashback

Hello,

 

I am running a business promotion that offers cashback for purchasing a specific service. This is defined and allowable in UK VAT legislation - VAT Notice 700/7, section 10.1 https://www.gov.uk/guidance/business-promotions-and-vat-notice-7007.

 

How do I account for the cashback to the customer after they have paid their invoice? Customer payment methods could be card/cash/cheque/bank transfer etc. and cashback payments will occur separate to the supply of services, so a simple discount will not work for 'applying' the cashback.

 

Hope you can help.

Solved
Best answer September 26, 2020

Accepted Solutions
Jen_D
Moderator

Cashback

Welcome to our forum, ,

 

You can use a service item to account for a customer cashback. To do that, follow the steps below:

 

  1. Click the Gear icon and pic Products and services.
  2. Tap New then choose a Service item.
  3. Fill in all the needed information.
  4. For the income account, use a Discounts/Refund Given. You can also use other accounts that you want to assign to the item for tracking.
  5. Once done, hit Save and close.

Now, you can assign this item on invoices by adding a negative amount to show a reduction. See this: 

 

Now, if you are the one who received a cash back or a refund for purchases made on your credit card, use the steps below:

What you should do:

  1. Click + New then choose Credit card credit.
  2. Find the appropriate account from the Bank/Credit Account drop-down box.
  3. Under the Category details section, select the account that you have for your cash back rewards whether expense/income account as you see fit.
    Note: If you don't have an account to track your cash back rewards, you need to create one. 
  4. Enter the other needed information.
  5. Select Save and close.

I'll be adding our Resource Guide here to help you with your tasks in QBO: QuickBooks Tutorials

 

If there are other things you want to ask or need help with, let me know in the comment below. I'll be right here to help you any time. Have a good one!

View solution in original post

1 REPLY 1
Jen_D
Moderator

Cashback

Welcome to our forum, ,

 

You can use a service item to account for a customer cashback. To do that, follow the steps below:

 

  1. Click the Gear icon and pic Products and services.
  2. Tap New then choose a Service item.
  3. Fill in all the needed information.
  4. For the income account, use a Discounts/Refund Given. You can also use other accounts that you want to assign to the item for tracking.
  5. Once done, hit Save and close.

Now, you can assign this item on invoices by adding a negative amount to show a reduction. See this: 

 

Now, if you are the one who received a cash back or a refund for purchases made on your credit card, use the steps below:

What you should do:

  1. Click + New then choose Credit card credit.
  2. Find the appropriate account from the Bank/Credit Account drop-down box.
  3. Under the Category details section, select the account that you have for your cash back rewards whether expense/income account as you see fit.
    Note: If you don't have an account to track your cash back rewards, you need to create one. 
  4. Enter the other needed information.
  5. Select Save and close.

I'll be adding our Resource Guide here to help you with your tasks in QBO: QuickBooks Tutorials

 

If there are other things you want to ask or need help with, let me know in the comment below. I'll be right here to help you any time. Have a good one!

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