Discount on Vendor BIll that owns money

Ffraga · ‎February 02, 2023

Hello,

I'm having an issue that I don't know if the simple way is the correct way.

I have a vendor that is also a customer.

Due to some issues in the past, he didn't pay some invoices. Now we agreed that he will pay its debt by giving us a 10% discount on the next purchases from him until it covers the balance.

But I don't how could I use the discount given in the bills to cover the open invoices, I was thinking that a credit memo would solve it, but I think I'm missing something.

could someone help, please?

Thanks

MJoy_D · ‎February 02, 2023

I can help you with applying the discount to your invoices, @Ffraga.

You can use a clearing account to transfer or apply a vendor credit to customers' invoices. I'll show you how.

Here's how to set up a clearing account:

Go to the Lists menu and click Chart of Accounts.
Right-click anywhere in the Chart of Accounts then choose New.
Once you are in the Add New Account window, choose Bank then select Continue.
In the Account Name field, enter Clearing Account.
Click Save & Close.

Then, create two journal entries:

Go to the Company menu and click Make General Journal Entries.
Debit the Clearing account you created earlier and credit Accounts Receivable for the amount of sale.
In the Name field on the Accounts Receivable row, enter the customer name created in QuickBooks Desktop.
Click Save & New.
Create a second general entry. This time, debit Accounts Payable and credit Clearing Account for the amount of the sale.
In the Name field on the Accounts Payable row, enter the vendor name that needs the bill credit created.
Click Save & Close.

Once done, you can now apply the credit to your invoice:

From the Customer menu, select Receive Payments.
Select the invoice.
Click Set Credits and select the credits to apply.
Select Done.
Then, click Save and close.

You can check out these articles for more information about creating a clearing account and applying credit to your invoices:

Here's more information on how you can resolve common issues when applying a payment towards an invoice for multiple payment methods, reapplying, refunding payments, and more.

I'm always here if you need more help recording your transactions. I'm always here to help. Have a great rest of the day!

View solution in original post

Tori B · ‎February 06, 2023

Thanks for following up with us, @Ffraga.

I've noticed in the past when we see this error message, it's usually because users have the bills set as "Schedule Online Payment" in the Pay Bills screen. If this is the case for you, let's set the payment method to Check. Then, try applying the discounts again.

For more information about handling discounts in QuickBooks Desktop, check out Pay Bills in QuickBooks.

Please let me know if you run into any issues along the way. I'm happy to help. Take care!

View solution in original post

MJoy_D · ‎February 02, 2023

I can help you with applying the discount to your invoices, @Ffraga.

You can use a clearing account to transfer or apply a vendor credit to customers' invoices. I'll show you how.

Here's how to set up a clearing account:

Go to the Lists menu and click Chart of Accounts.
Right-click anywhere in the Chart of Accounts then choose New.
Once you are in the Add New Account window, choose Bank then select Continue.
In the Account Name field, enter Clearing Account.
Click Save & Close.

Then, create two journal entries:

Go to the Company menu and click Make General Journal Entries.
Debit the Clearing account you created earlier and credit Accounts Receivable for the amount of sale.
In the Name field on the Accounts Receivable row, enter the customer name created in QuickBooks Desktop.
Click Save & New.
Create a second general entry. This time, debit Accounts Payable and credit Clearing Account for the amount of the sale.
In the Name field on the Accounts Payable row, enter the vendor name that needs the bill credit created.
Click Save & Close.

Once done, you can now apply the credit to your invoice:

From the Customer menu, select Receive Payments.
Select the invoice.
Click Set Credits and select the credits to apply.
Select Done.
Then, click Save and close.

You can check out these articles for more information about creating a clearing account and applying credit to your invoices:

Here's more information on how you can resolve common issues when applying a payment towards an invoice for multiple payment methods, reapplying, refunding payments, and more.

I'm always here if you need more help recording your transactions. I'm always here to help. Have a great rest of the day!

Ffraga · ‎February 02, 2023

Hello @MJoy_D thank you for your explanation

I have only one last question.

Do I have to set the discount on the vendor's bill, or I can just add a memo like , "referring the 10% discount on bil 12345" on this step

Debit the Clearing account you created earlier and credit Accounts Receivable for the amount of sale.
In the Name field on the Accounts Receivable row, enter the customer name created in QuickBooks Desktop.
Click Save & New.

thanks again

AbegailS_ · ‎February 02, 2023

Thanks for getting back to us, @Ffraga.

Yes, you can set up a 10% discount on the vendor's bill to offset the remaining balance. Let me show show you how.

Go to the Vendors menu.
Select Pay Bills.
Select the vendor bill.
Click the Set Discount button.
Enter the Amount of Discount.
Select the Discount Account.
You can click Add New if the income account is not yet listed.
Click Done.
Click Pay Selected Bills.

Paying bills is part of your usual accounts payable workflow in QuickBooks Desktop. To see the complete list of workflows and other vendor-related transactions, please check this article: Account Payable Workflow.

Please let me know if you need further assistance in handling your bills in QuickBooks Desktop (QBDT). I'll be here to help you out. Have a good one.

Ffraga · ‎February 06, 2023

Hello!

I tried to follow your steps to set the discount but when I click on set discount I receive this warning message

"You can't set discounts or credits to pay bills through QuickBooks pay bill service."

could you help me?

Thanks!

Tori B · ‎February 06, 2023

Thanks for following up with us, @Ffraga.

I've noticed in the past when we see this error message, it's usually because users have the bills set as "Schedule Online Payment" in the Pay Bills screen. If this is the case for you, let's set the payment method to Check. Then, try applying the discounts again.

For more information about handling discounts in QuickBooks Desktop, check out Pay Bills in QuickBooks.

Please let me know if you run into any issues along the way. I'm happy to help. Take care!

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Discount on Vendor BIll that owns money