How to record discounts received from suppliers ?

sarmad4422 · ‎September 26, 2019

I always get a discount from my supplier on every bill. How should I record that discount ?

Rustler · ‎September 26, 2019

I disagree

it depends on the discount, if the discount is a sales discount you should edit the total price of each item. Sales discounts are not booked separately

If it is an early payment discount, that is a credit memo using an income account to book the amount, usually other income.

For Merchandise purchased during the year, cost means the invoice price minus appropriate discount plus transportation or other charges incurred in acquiring the goods. You must reduce the cost of inventory by a trade (or quantity) discount.

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Rustler · ‎September 26, 2019

I disagree

it depends on the discount, if the discount is a sales discount you should edit the total price of each item. Sales discounts are not booked separately

If it is an early payment discount, that is a credit memo using an income account to book the amount, usually other income.

For Merchandise purchased during the year, cost means the invoice price minus appropriate discount plus transportation or other charges incurred in acquiring the goods. You must reduce the cost of inventory by a trade (or quantity) discount.

john-pero · ‎September 26, 2019

Record a Vendor Credit. I prefer using an income account called Discounts/Refunds but you can also post as a contra-expense either to a group discount expense account or to the same expense account the bill is for. Then when paying bill apply the credit