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How to handle early payment discount taken to an invoice when a customer pays on time? Example: 1% 10, Net 30 or 2% 10, Net 30

In an ideal accounting process, I would think handling discounts taken by the customer would be part of the “Receive Payment” form screen. They will have the additional line to enter discounts given to the customer as negative amount entered and thereby would match customer payment amount.

Since the QBO Receive Payment screen is unable to handle this specific transaction, you will need a way-around approach. No doubt, it is unnecessary and time-consuming steps to handle such a simple customer payment transaction.

You will need to create a CREDIT MEMO for the early discount taken by the customer. See photo#3 for reference.

For one-time, you will also need to create a new GL account for “Discounts are given” (see photo 1) and a new Service item for “Early Payment Discounts” (see photo 2).

Once you’ve created a Credit Memo, go to Receive Payment screen, apply for payment against the open invoice as well as apply to subtract early payment discounts to match customer payment. See photo#4 for reference.

See screenshot photo#5 for reference to how it will show Discounts given in P&L.

See screenshot photo#5 for reference to how it will show Discounts given in P&L.

Need a better way to handle discounts taken by customers, add to QuickBooks Online Feature Requests here:

http://feedback.qbo.intuit.com/


 

Photo#1

Open new GL Account
Open a new GL Account

Photo#2

Create new Product Item for Early Discounts Taken
Create a new Product Item for Early Discounts Taken

Photo#3

Create Credit Memo
Create Credit Memo

Photo#4

Receive Payment Screen
Receive Payment Screen

Photo#5

Profit & Loss with Discounts Given
Profit & Loss with Discounts Given

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