We resell goods from a supplier, earning a % commission on each sale. Until now, the supplier required us to pay their bill in full, then send them an invoice for our commission on the sale. Moving forward, we are to reduce the supplier bill payment by the amount of the commission. To record this, is it as simple as selecting the bill from Pay Bills, then click Set Discount, enter $ amount and select the Income account?
Technically, putting a discount and choosing the income account will work.
You can also create a Vendor Credit, and use it to offset your bill.
To create a vendor vendor credit:
- Go to Vendors and choose Enter Bills.
- Click the Credit radio button above the word Credit.
- Enter the name of the vendor in the VENDOR field.
- Add your commission item to the table.
- Click Save & Close.
To apply the credit to the bill:
- Open the bill, and click Pay Bill.
- Click the Set Credits button.
- Choose the credit you created.
- Click Done. You'll see the amount applied in the CREDITS USED field.
- Remove the amount in the AMT. TO PAY field if you're not paying the bill in full.
- Click on Pay Selected Bills.
If you have other questions, please let us know.