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Early pay discount taken, then paid later

I have a large customer that takes deductions on their payments before we receive the paperwork. In the most recent instance, this customer disputed the pricing and short-paid their invoice. They also took an early pay discount. Now, after we disputed the pricing as being correct, they paid us for the short-paid amount as well as for the early pay discount amount they previously took. Obviously, I can post their payment against the outstanding portion of the remaining balance on the invoice, but how do I post the portion of the payment for the early pay discount that they took but are now paying back?

 

Thanks for your help!

1 Comment
Moderator

Re: Early pay discount taken, then paid later

Thank you for reaching out in the Community, @Guenevere.

 

Let me help record the discount taken from your customer. Since this is a short paid amount from the actual invoice you created, you can post the discount given as expense. To do that, you'll need to create an expense account and service item for the discount.

 

I can provide you with the following samples below.

 

First, create an Expense Account by going to the Chart of Accounts. You can name it as Discount Given. 

 

 

 

Next, create a Service Item and choose the Discount Given expense account on the Account field.

 

 

 

Now you can create a Credit Memo to the customer using the item. 

 

 

 

When receiving the payment, you can now apply the discount created. 

 

 

 

Once done, you can open your Transaction Detail report to review everything. Let me include these additional references in case you need them.

 

Record a credit memo or refund in QuickBooks Desktop

 

Customize reports in QuickBooks Desktop

 

That should do it. Keep me posted how the steps went. I'll always be here to provide further help with your discounted invoice.