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jasonnyc258
Level 1

I have a bill for $5750 in the end of December. it was paid in Jan and i gave them $150 Discount, How do i record the $150 as income? i have the account for Income

There is an income account setup for discounts. but lost how to put it all together so it matches correctly. thank you
3 Comments 3
AbegailS_
QuickBooks Team

I have a bill for $5750 in the end of December. it was paid in Jan and i gave them $150 Discount, How do i record the $150 as income? i have the account for Income

Hello there, jasonnyc258.

 

I'd be happy to share some insights on how you can record discounts.

 

For sales discounts, you'll have to edit the total price of the items and not book them separately.

If it's an early payment, the discount is a credit using the other income account.

For merchandise purchased, reduce the cost of inventory by trade (or quantity) using the discount.

 

To learn more about discounts check on this article: Add a discount to an invoice or sales receipt in QuickBooks Online.

 

Keep in touch if there's anything else I can do for you. Take care!

 

jasonnyc258
Level 1

I have a bill for $5750 in the end of December. it was paid in Jan and i gave them $150 Discount, How do i record the $150 as income? i have the account for Income

They are only paying the $5600 out of the $5750. Since im on accrual basis, i can't edit the bill since it as last year, as that would mess up my taxes.  I need to take the difference of $150 as income and then somehow mark the bill "PAID"  and match it and show that i dont owe that vendor any more $$.  Thoughts?

 

GlinetteC
Moderator

I have a bill for $5750 in the end of December. it was paid in Jan and i gave them $150 Discount, How do i record the $150 as income? i have the account for Income

Thanks for providing additional details, jasonnyc258. I can help you with how to handle this in QBO.

 

We can use the Write Off Invoices tool. This way, the system automatically applies discounts to zero-out bad invoices and posts them to your write-off account. 

 

Let's set up first a bad debts expense account from the Chart of Accounts menu. Then, create a non-inventory bad debts item from the Products and Services page. Just select Bad debts as the Income account for this. 

 

Right after, record a Credit Memo for the bad debt so you can apply it to the invoice. Doing so will help you write off the invoice's small amounts. Also, your accounts receivable and net income will stay up to date. I'll walk you through how.

 

To create a credit memo:

 

  1. Go to + New from the left menu. 
  2. Select Credit memo and choose the appropriate customer. 
  3. Select the Bad debts item you've created in the Product/Service column. 
  4. Enter the write-off amount in the Amount column. 
  5. Type in Bad Debt in the Message displayed on statement box.
  6. Click Save and close.

Once done, apply the credit memo to the invoice. Here are the steps:

 

  1. Go to + New from the left menu. 
  2. Select Receive payment under Customers
  3. Choose the appropriate customer. 
  4. Check the box beside the invoice from the Outstanding Transactions section. 
  5. From the Credits section, check the box beside the credit memo.
  6. Click Save and close.

For the detailed instructions, see Steps 2-5 via this article: Write off bad debt in QuickBooks Online.

 

I'm just a post always if you need more help.

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