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How to Book Vendor and Customer Discounts in QuickBooks
Published 02/16/2010 | 
I looked on your site and could not find the answer that I need. It is most likely my fault as I'm not the best with computers. If you know, I was hoping you could point me in the right direction. This concerns vendor discounts vs customer discounts and determining the account type, income or expense. Our business is retail with an inventory. Should you apply a vendor discount to the COG's account or an expense account? Also, for a customer discount, what would be the correct account? Thank You!
For vendor discounts, you should apply the credit to the same account you use for the charges. If you book their bills to COGS, book the discount to the same account. You can do the same thing for customer discounts by using the same item you used on the invoice, but if you want to keep track of the discounts you've given you might want to create a discount item mapped to a revenue account called something like discounts and use it instead. It will have a negative balance, of course.
Written by +Ruth Perryman, CMA, CFE, CFM, MBA
Ruth is the president of The QB Specialists, Inc. and has provided QuickBooks help to thousands of businesses around the world since 1996. She is an Intuit Solutions Provider, an Advanced Certified QuickBooks ProAdvisor, and a member of the Intuit Trainer/Writer Network. She is also certified in QuickBooks Point of Sale and QuickBooks Enterprise Solutions.
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