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Best answer March 29, 2020
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@VBurgs wrote:
I sell products to a distributor. The distributor offers services to me such as featuring my products in their catalog. I pay the distributor for these services through a reduction on the invoice for the products I sell them.
Ex:
- I invoice them for $1,000 worth of product.
- They feature my products in their catalog for $100.
- They pay me $900 instead of the $1,000.
How do I record this? First thought was Credit Memo but I don't think that will work.
- They feature my products in their catalog for $100.
Create a new product/service code for this promotional item.
This should be your expense item like Advertising/Promotional type. When you create a new product/service item, for the Income Account field (see the screenshot below for reference), select this Expense Account.
Example:
Your Invoice will something like this
- I invoice them for $1,000 worth of product = $1,000
- They feature my products in their catalog for $100 = ($100) ===> enter negative amount
- They pay me $900 instead of $1,000 = $900
So, you're creating a Client Invoice that includes both Revenue and Credit for Client's service on the same Invoice.
Hope this helps!
@VBurgs wrote:
I sell products to a distributor. The distributor offers services to me such as featuring my products in their catalog. I pay the distributor for these services through a reduction on the invoice for the products I sell them.
Ex:
- I invoice them for $1,000 worth of product.
- They feature my products in their catalog for $100.
- They pay me $900 instead of the $1,000.
How do I record this? First thought was Credit Memo but I don't think that will work.
- They feature my products in their catalog for $100.
Create a new product/service code for this promotional item.
This should be your expense item like Advertising/Promotional type. When you create a new product/service item, for the Income Account field (see the screenshot below for reference), select this Expense Account.
Example:
Your Invoice will something like this
- I invoice them for $1,000 worth of product = $1,000
- They feature my products in their catalog for $100 = ($100) ===> enter negative amount
- They pay me $900 instead of $1,000 = $900
So, you're creating a Client Invoice that includes both Revenue and Credit for Client's service on the same Invoice.
Hope this helps!
Hi there, VBurgs.
Let me share some information on why adding a new line item for Promotional Item Expense includes in the 6% you've given to your customer.
In QuickBooks Online, adding the discount feature will calculate the entire items we've added to the invoice. Though, we can get the subtotal for the multiple items. For example, we have ten items added on the invoice. We can get the subtotal for the first item up to the 5th item. It'll show the total amount without the percentage calculated by QBO.
However, when adding multiple line items, the system will still include the new ones in the 6% discount. It's because the discount feature works to calculate the entire line items of the invoice. Also, adding a discount per line item is unavailable.
Let's take a look at this sample screenshot:
If you don't want the other items included in the 6%, I would suggest creating a new invoice for them. That way, they'll not be include to the 6%. Let's just make sure to enter the same customer information.
Let me know if you have other questions. I'll be around to help. Take care!
