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RKN
Level 1

Customer Credits/Discounts

We have customers that automatically apply a discount to our invoices so they actually pay less than what we invoice.  How do we handle this without creating a journal entry?  We would like to issue a credit memo, but it appears that credit memos are tied to an item, thus affecting inventory.  Is it possible to create a credit memo that is not tied to an item/inventory?  They also pay on 60 day terms, so the A/R for the invoice month is not in the same month as payment is received.

5 Comments
MaryJoyD
QuickBooks Team

Customer Credits/Discounts

Let me show you how to add a discount to an invoice, @RKN

 

A credit memo is used when your customer returns items for which you have already recorded an invoice, customer payment, or sales receipt.

 

You can create a discount item to apply it to your invoice. It could be a percentage or a fixed amount. You can follow the steps below on how to create it.

 

  1. Go to your Lists menu and then click on Item List.
  2. Choose the Item drop-down arrow and select New.
  3. Click the Type drop-down and select Discount.
  4. Enter the item name (Discount) and the description.
  5. In the Amount or % field, enter the discount amount or percentage:
  6. Go to the Account drop-down arrow and then click the income account you want to use to track discounts you give to customers.
  7. Select the Tax Code drop-down arrow and choose a tax code for this item.
  8. Click OK once you’re done.

After that, here's how to add them on an invoice: 

 

  1. Go to the Customers menu to get to Create Invoices window.
  2. Choose a customer on the Customer:Job field.
  3. Record the necessary items.
  4. Enter the Discount on the following line.
  5. Click the Save & Close button once you’re done.

For additional resources, check out these articles: 

Please know that I'm only a post away if you have additional concerns in handling those discounts. I'm more than willing to help. Take care and have a great day!

racengr
Level 2

Customer Credits/Discounts

I'VE TRIED THIS AND IT DOES NOT DISCOUNT THE ENTIRE INVOICE. IT ONLY DISCOUNTS THE PRECEDING LINE.

HOW DO YOU DO THE ENTIRE INVOICE AMOUNT SAY FOR A SENIOR DISCOUNT.

Rasa-LilaM
QuickBooks Team

Customer Credits/Discounts

Thanks for joining on this thread, @racengr.


I appreciate you for following the resolution provided by my peer and sharing its result.


Applying a senior discount for the entire invoice is quick and simple. Let’s create a specific item for your discount so you can easily identify it.

 

  1. Go to the Lists menu at the top to select Item List.
  2. Click the Item drop-down arrow to choose New.
  3. From the Type drop-down, pick Discount and then enter the item name ( Senior Discount) and the description.
  4. Key in the amount or percentage for the discount in the Amount or % field.    
  5. In the Account field, type in the appropriate income account for the item.
  6. Choose the appropriate code for the discount (Taxable or Non-taxable).
  7. Hit OK to keep the changes.

I've attached a screenshot on how the transaction looks like after following these steps.

ds.png
Now that we’re all set, let’s go to the invoice you’re working on. This time, enter the discount item below the Subtotal line.


Let me know if you have any clarifications or questions. I’ll get back to answer them for you. Have a great rest of the day.

racengr
Level 2

Customer Credits/Discounts

I don't see a subtotal line on the invoice in my version QB 2019 Desktop Pro. I entered a % for the discount below  and skipped a line. It only discounts the line immediately above it (1 item) not all the lines (items). Am I missing something?

 

 

JonpriL
Moderator

Customer Credits/Discounts

Hello there, @racengr!

 

You'll have to select an expense account for the discount item so it'll subtract to the total amount of your sales.

 

In case you need some ideas, here are articles you can read for reference: Income and Expenses for QuickBooks Desktop.

 

Let us know in the comments down below if you have any other questions.

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