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Total Air
Level 2

Vendor Early Pay Discount before tax

I do not currently separate tax on vendor bills.

This creates an issue with my largest vendor (hundreds of invoices each month) who offers me an early pay discount, before tax.

I cannot set up the Quickbooks terms using the automatic discount because QB will take the discount off the total bill which includes tax. I am left to either add the discount on a separate line at the time I enter the bill or enter the discount at the time I pay the bill. 

Both of these are time consuming and prone to data entry errors.  When I pay a statement there are HUNDREDS of invoices on the statement which I would have to apply the discount to each one at the time of pay.  Putting the discount on at the time of entering the bill means I change the actual bill amount which could make finding that bill more difficult if a question arises or a credit is needed, etc. 

 

Can someone help me with a better process on how to handle this issue?  If I do start separating the tax as an item on the vendor bills, will I be able to set up the automatic discount to only calculate the expense and not the total bill?  

1 Comment
AlexV
QuickBooks Team

Vendor Early Pay Discount before tax

Good day, Total Air.

 

I understand that you need to add a discount to your bills. The best way I can suggest to enter this is by creating a non-taxable discount item and add it as another line item.

 

You can follow these steps in creating a non-taxable discount item:

  1. Go to the Lists menu and select Item List.
  2. From the Item drop-down, select New and choose either Service or Non-inventory Part.
  3. Enter all details needed and make sure to select Non-Taxable Sales as the Tax Code.

I have some articles here that you can check for more details about bills:

Please post again if you need anything else. Have a great day!

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