We have a vendor that offers a discount if payment is made within 10 days of invoice. QuickBooks applies the discount for each credit memo as well. How do I avoid this?

dawn-hebert · ‎December 16, 2019

Catherine_B · ‎December 17, 2019

We can set a payment term and set conditions to it, dawn-hebert.

This option will help you identify when discounts will be applied to the conditions you set to the payment term. We can also use this feature instead of adding the discount in another line item.

Every time that you pay a bill and enter the the terms, QuickBooks will automatically calculate and apply the discount. You also have the option to unapply it by zeroing the amount out.

Let me show you how:

Go to the Lists menu.
Select Customer & Vendor Profile Lists and then Terms List.
At the bottom, click the drop-down arrow beside Terms and select New.
Enter a name for the term.
You can choose Standard term.
Enter the Net due, the Discount percentage and Discount if paid within 10 days.
Click OK.

When you create a bill, you can choose the term and the discount date will also show. You have the option to apply the discount when your about to pay the bill.

Here's how:

From the opened Bill, click the Pay Bill option from the menu.
Check the bill to be paid.
Click the Set Discount button to check the amount and account where the discount is applied.
Select Done.
Review the amount and then click Pay Select Bills.

If you have further questions, I'll be here to help you out.

View solution in original post

Kayla H · ‎December 16, 2019

Hello, @Dawn-herbert.

I'm happy to see you in the Community. I can provide information regarding Quickbooks issuing discounts on credit memos. When a discount is received from a vendor you should add this in the invoice versus the discount and credit option in Quickbooks. Please see the instructions below.

From the QuickBooks home screen choose List menu.
Select Item List.
Right-click anywhere on the screen and go to the new option.
Pick the type drop-down, then select Discount.
Give an appropriate name to discount items and give a brief description.
In the amount or % field enter the amount of the discount.
From the Account drop-down, select the income account that you want to use to track the discounts given.
Then select the Tax Code for the item.
Select OK.
Save and Close if you are satisfied with the information you have entered.

Once this item has been created we can add a line item to your invoice to apply the discount given.

If further instructions are needed please see the link below.

https://quickbooks.intuit.com/learn-support/en-us/manage-invoices/create-an-invoice-in-quickbooks-de...

If there are any more questions or concerns, I'm only a click away.

dawn-hebert · ‎December 17, 2019

When I select the New Item and Discount, the description states not to use this item type for an early payment option. It also seems very tedious because I'd have to know when payments will be issued, then also go back into the invoices to add a line item to apply the discount. The early payment discount option is available in the Vendor Center so QuickBooks should allow you to choose whether or not to use the discount. Is this not available? Or code should be written to exclude early payment discounts from Vendor Credit Memos.

Something even more interesting is that the credit memo date is 11/1/2019, therefore, the early payment discount is null where the discount is concerned. We want to accept the early payment discount wherever possible but certainly not on credit memos.

Catherine_B · ‎December 17, 2019

We can set a payment term and set conditions to it, dawn-hebert.

This option will help you identify when discounts will be applied to the conditions you set to the payment term. We can also use this feature instead of adding the discount in another line item.

Every time that you pay a bill and enter the the terms, QuickBooks will automatically calculate and apply the discount. You also have the option to unapply it by zeroing the amount out.

Let me show you how:

Go to the Lists menu.
Select Customer & Vendor Profile Lists and then Terms List.
At the bottom, click the drop-down arrow beside Terms and select New.
Enter a name for the term.
You can choose Standard term.
Enter the Net due, the Discount percentage and Discount if paid within 10 days.
Click OK.

When you create a bill, you can choose the term and the discount date will also show. You have the option to apply the discount when your about to pay the bill.

Here's how:

From the opened Bill, click the Pay Bill option from the menu.
Check the bill to be paid.
Click the Set Discount button to check the amount and account where the discount is applied.
Select Done.
Review the amount and then click Pay Select Bills.

If you have further questions, I'll be here to help you out.

CatDet5627 · ‎March 19, 2020

How do I know which account to apply the discount to? In our case, the bill is for parts used in manufacturing. Should the discount be against COGS?

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We have a vendor that offers a discount if payment is made within 10 days of invoice. QuickBooks applies the discount for each credit memo as well. How do I avoid this?