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Handling manufaturer rebates in COGS

If anyone can help me out I'd appreciate it. (QB pro 2003)

I recently purchased 1000 widgits from my distributor for 3 dollars each. These widgits will be resold over the course of the next year

As a "dealer" I am entitled to, and have mailed in a 2 dollar per widgit rebate from the manufacturer.

My PO, bill, and payment to the distributor reflect a "cost" of $3 per widgit.

As far as I can tell, my rebate check from the manufacturer will be deposited in my bank account as a reduction in my COGS account.

The problem with this is that it doesn't reflect my true cost of the widgits ($1 ea)

Is there any way to "allocate" the rebate check to the cost of the widgits instead of a blanket reduction to COGS???

Thanks,

-Joe

Reply to
jwchilds
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Could you issue a credit order or apply a discount to the price paid for the widgits?

Reply to
Laura

One possibility:

Create a COGS sub-account for Widgets (and any others you will get frequent rebates on). Edit the Widgets item to point to the new sub-account. Code the rebate check to the sub account.

This won't change the price in the item itself but its also not supposed to. However you will be able to keep the Widget costs (and rebates) isolated so that you can see a total that should reflect the end cost being $1ea.

Reply to
Tee

Been there, done that :) Also created a Widgit sales sub-account. Due to the rebates, so far in april, I'm running a negative number for COGS! My best month ever :) My problem is that l plan to have these widgits in stock for quite a while. If I decide to sell one for $2 down the road, I know I'm making a buck, but to quickbooks it looks like I'm losing a buck.

Would this (somewhat ugly) scenario work?

1.Edit my original PO's and distributors bills to reflect "after rebate" cost per item.
  1. Since I've already paid these bills, I should have an overpayment to this distributor in the amount of the anticipated rebate, yes?
  2. when manufacturer rebate arrives, record it as an overpayment refund from the vendor

TIA !

-Joe

Reply to
jwchilds

On the Vendor Bill, use the Items tab to record the Widgets at $1. On the expense tab of the same Bill enter the $2 per widget rebate amount. Code it to an account such as Rebates Receivable (a current asset account). Then when the rebate is received, code it to Rebates Receivable .

Reply to
Karl Irvin

Karl, you are the man!! That is exactly what I was looking for. If you're in need of any widgits, let me know and I'll cut you a special deal :)

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-Joe

Reply to
jwchilds

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