Make your Rewards account either Other Income or Other Expense.
As Other Income, it is not part of Gross Receipts.
As Other Expense, it will run negative because it Reduces the total expenses you can report.
And either way, it falls to the bottom of the P&L.
Welcome to the Community. I'm here to assist you with any questions you may have concerning cash back rewards in QuickBooks Desktop.
The process of recording cash back rewards are almost the same with QuickBooks Online. You can track the points until you use them.
These rewards are income to the business either you apply them as a credit reducing the balance or acquire a check and create a deposit.
You can create an Other Income account by following these steps:
Please know I'm always available anytime you need assistance concerning the process. The Community will be sure to get back to you.
LLC owner in Arizona here. I've had my company taxes prepared by a professional CPA firm here in Arizona for a decade, and cash back rewards for cards are considered as rebates by the IRS. We've been filing as such for years, no problems. Please contact a CPA or other tax professional in your jurisdiction, your mileage may vary, but I thought my experience could be valuable here.
It's nice to see you here in the Community, @sneligan.
You can enter the cashback credit as an income to your company. I can guide you through the steps.
As mentioned above, you can continue to track your cashback rewards until you utilize them.
You'll need to create an income account for your points. Here's how:
Once done, you can now record the cashback credit. You can follow the steps below:
You can always get back to me if you have any other questions or concerns. I'll only be a post away.
I logged my cash back redemption to my CC account as a postive add under "Uncategorized Expenses"
This balanced my books without the redemption being counted as income - because to me it is not income and I should not be taxed on cash back rewards...right or wrong, that's how I solved it....
My question is more about reconciling accounts year-end. Example: I buy something for $100 with my CC and get $1.00 "cash back" in the form of a statement credit. So if I book this credit to an other-income account then pay the remaining balance due of $99 from checking, that would leave a QB balance for my CC of $1.00. Do you recommend journal entries once a year to resolve this?
I appreciate the detailed scenario, TheDude2020.
Your suggestion on creating a Journal Entry can work, here's how:
Check out these articles for reconciliation reference:
I also recommend checking with your accountant to make sure you're doing it correctly.
We use Quick Books Online and after I choose OTHER INCOME, there is a DETAIL TYPE option, where I have to make one more choice. The options are:
Other Investment Income
Other Miscellaneous Income
Neither one of them sounds right.
I don't see these as a discount on purchases so I wouldn't put it against Office Supplies or gas. Why not enter them as negative expense items in "Bank & Credit Card Fees"? The bank charges me to use the credit card and other accounts and, sometimes, it discounts/rebates some of those fees because they "like" the way I'm using the accounts. This could get confusing if the rebates exceed the fees in a particular period but if that happens you have a nicer bank than I do. ;-)
Yes, you can approach the amount your vendor deducts from how much you owe as a bill credit, @cschmookler. I'm here to guide you how.
Entering a bill credit in QuickBooks will depend on the product that you're using. If you have QuickBooks Desktop (QBDT), here are the steps on how to enter a bill credit:
On the other hand, if you're using QuickBooks Online (QBO), make sure to first create a Vendor credit transaction. This way, you'll be able to record the category, product, or service you've received. After that, you can apply it to a bill. Here's how:
After the process, you can pull up a vendor report to check the accuracy of the bill credit you've created. For QBDT, go to the Reports menu, then select Vendors & Payables. While for QBO, go to the Reports menu, then visit either the Expenses and vendors or the What you owe section to choose the report you want.
Please let me know if you have other concerns. I'm just around to help. Take care always.