Newish to quickbooks.... I have set up an account for early inovoice discounts, ie: invoiced 3,000 on 2% net 30. so when i pay before 30 days its 2%($60) off so i pay 2940 and the 60 goes into an account. The question is that account shows up as income on my monthly P/L. Should it show up as income? Or should i set the account up a different way. please help pleaseeeeee
I'd be delighted to help share some information about setting up an early payment discount in QuickBooks.
Tracking sales discount should show up on your expense account and not on an income. You have the option to choose any expense account when receiving an early payment from your customer. Since the discount is showing on the income account of your monthly P&L, you'll need to modify the discount account.
Let me show you where to edit:
Go to Customers menu and select Customer Center.
Double click the customer's payment on the Transactions folder.
Click the Discounts and Credits tab.
Choose an expense account to track your Discount Account.
Once finished, click Done.
If you're unsure what expense account to choose for your business, I'd recommend consulting your accountant first to ensure you have an accurate record.
Here's a helpful article you might want to check out if you need help in setting up early payment discounts in the future: Set up payment terms.
Let me know if you have additional questions about your payment discount. I'm always here to help.
Allow me to share additional information about early payments discount for vendor invoice in QuickBooks Desktop.
To answer your question, you'll need to use an income account for the amount of the discount. 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:
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.