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When Customer Takes Entire Invoice Amount as Discount

I've got a customer that receives a 2% discount off invoice for an "advertising allowance." (We all know it is a price decrease, but whatever). This customer does not take the 2% off each payment against invoices, rather they do it on a quarterly basis. Thus they take discounts in lump sums across multiple invoices.

When I go into Receipts and enter the full amount of each invoice as a discount, Peachtree (ver. 9) will not allow it. For example, say I have

5 invoices at $100 each. Suppose the customer's discount is $500. If I put $100 in the discount column of the Receipts window for five invoices, the amount paid column briefly goes to 0.00 and then the red checkmark appears in the box in the Pay column. However, if I post these transactions it's as if nothing was ever entered. When I look at the Journal entry on the Receipt Screen it shows a one sided transaction showing the checking account Receipt Amount as blank (no debit or credit) and nothing else. No discount account is shown. Aged receivables are not changed.

Anybody know a workaround?

Reply to
powrwrap
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You need to issue a credit memo (or a negative invoice) for $500 and then in receipts enter positive amounts on the various invoices plus check off the credit for $500 to net the receipt to zero.

Reply to
Laura

Reply to
Ralph A. Jones

Arrgghh! Why didn't I think of that?! Thanks.

Reply to
powrwrap

I don't have a "Discounts Taken" account set up as a cash account. I do have an account called "Purchase Discounts" that is classified as a COGS account. Could I temporarily classify that account as a cash account for purposes of these transactions, then switch it back to a COGS?

If I do this, I presume one consequence would be the expense of the discount will not figure into gross profit calculations but would be a general expense.

Reply to
powrwrap

Since this is a sales-side transaction, you do not want to use "Purchase Discounts" (used for cost-side transactions when *you* take advantage of a discount offered on a purchase from a supplier). If you used one of the canned COA's, look for an account called "Sales Discounts". Use that. If it is not in your COA, create it (usually in the revenue-level accounts in the 4000 range -- an odd duck in that it is a credit balance account that receives debits) and call it "Sales Discounts Taken" (slightly more explanatory than "Sales Discounts"). It does not have to be (and really ought not be) a "Cash" account -- I used that term loosely to describe the "Receipts" screen trickery we are performing. You actually set the debit account posting by using the "Journal" button (IIRC) in the "Receipts" screen (but this may depend on your version of P'Tree). Once you have set the debit posting to the "Sales Discounts Taken" account in the "Journal" screen, "Sales Discounts Taken" will appear as the "Cash" account in the "Receipts" screen. Just remember to set it back to your normal "Cash" account when you are done posting the "discount" transaction and all will be good to go again.

Reply to
Ralph A. Jones

.com...

ANOTHER WAY: Enter the amount actually collected to record the amount paid, which will leave the deduction in Accounts Receivable.

Then change the "Cash" account to the code used for advertising. This will cause a debit to advertising instead of to an actual cash acct. Record the deduction as a "receipt" to advertising which will credit the balance in accts receivable and zero out the Acct Rec.

Reply to
shagnasty

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