How to Set up a Sales Discount Account in QuickBooks?

Sales discounts are provided to customers by certain sellers when they offer early payments in the given discount periods. Early […]

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Sales discounts are provided to customers by certain sellers when they offer early payments in the given discount periods. Early payment discounts and cash discounts are other terms for sales discounts. In simple words, sales discounts are considered one of the ways to influence customers to do an early payment.

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Furthermore, sales discounts are registered in the contra-revenue account from the perspective of accounting. To determine the net sales, the particular debit balance of the sales discount will be subtracted from the Gross Sales.

In order to create and set up the sales discount and add it to particular invoice, you need to implement the steps provided in the write-up given below.

How to Set up a Sales Discount Account in QuickBooks Desktop?

Here are the steps to set up sales discounts in QuickBooks:

  • First, you need to press on the List option. Now press Item List. Now click the Item drop-down arrow that is present on the window for the item list.
  • Now you need to press on New. Now choose the Type drop-down. Now choose Discount.
  • The next step is to add the description along with the percentage or the discount amount and choose the tax code as non-taxable or taxable thereafter.
  • In the last step, You need to press OK.

How can You Create and then Add the Discount item to a Particular Invoice?

In QuickBooks Desktop, you can easily add a discount when recording a payment. Not to mention, you can also include a discount item on the invoice directly.

In case you have never used a discount item, here are the steps to create a discount item and then add the discount item to your invoice.

Step 1: Create a Discount Item

  • Choose the Lists menu. Now choose Item List
  • Choose the Item button. Now choose New.
  • Now choose Discount from the provided drop-down and complete all the required information. You will have the option to fix a discount percentage or a particular dollar amount. You will also be required to mention the account to utilize to monitor your discounts.
  • Press OK when you are all set.

Step 2: Include the Discount Item in Your Particular Invoice

QuickBooks determines a discount depending on the item or items. In case you wish to apply discount for a certain item, you should do a subtotal of the items prior to adding a discount item.

How to Add Discount for a Single Item?

Here are the steps to discount for a single item:

  • Put your service or product item on your particular invoice just like you would do normally.
  • On the line after that, put your discount item.
  • Ensure that the tax, rate, and amount display the result projected.

How to Add a Discount for Multiple Items?

Here are the steps to discount for more than one item:

  • Put your item on your particular invoice just like you would do normally. In case you have more than one item, but you wish to discount only some of them, you need to put those items on the invoice first.
  • After the items are ordered, put the Subtotal item on the particular line right away. QuickBooks will include the amount of all the items previous to the subtotal item.
  • Now, on the next line, put your discount item.
  • Ensure that the tax, the amount, and rate display your intended results.

How to Setup a Sales Discount Account in QuickBooks Online

Here are the steps to set up a sales discount in QuickBooks Online:

Step 1: Activate the Discount Setting

Here are the steps to turn on the discount setting:

  • Choose Settings. Now click Account and Settings.
  • Choose the Sales tab.
  • In the section for Sales Form Content, choose the particular Pencil icon.
  • Now turn on the Discount Setting.
  • Now choose Save and Done.

When such a setting is turned on, the optional discount field shows in the subtotal of your given sales forms, however, your customer will only be able to check it if a discount is added to the field.

Step 2: Set up Discounts and Implement them

In order to add a discount to your particular sales forms, there are two different options. You can include a discount to your sales form subtotal as a value or percentage. You can also include a discount

How to Add a Discount to the Subtotal of Your Particular Sales Forms

Once you have turned on the discount setting, you will witness the discount field right underneath the subtotal on invoices, quotes, or sales receipts.

Here are the steps to apply a particular discount on sales forms:

  • Choose +New
  • Step 2: Choose Invoice, Sales Receipt, or Quote
  • Step 3: Include your products or services in the Service/Product column. Now complete the remaining sales form.
  • Step 4: To register a discount, choose Discount percent to add the discount in the form of a percentage. Or choose a Discount value to add the discount as a particular amount.
  • Step 5: Add the amount or percentage you wish to discount in the given discount field.
  • Step 6: When it is complete, choose Save and Close or Save and Send.

How to Add a Discount on Your Sales Forms as a Line item?

In case you provide repeated or particular discounts, It is possible to include a discount on your particular invoice, sales receipt, or quote as a line item that has a description.

Note: It is not possible to use this method for percentages. It can be used for whole amounts only.

Here are the steps to set up and include the discount.

Step 1: Prepare a Discount Item

  • Choose Settings. Now click Products and Services.
  • Choose New
  • Choose Service or Non-stock for the type.
  • Add the Discount in the given Name field. If you wish to make several discount items, provide every discount a special name which will help to distinguish.
  • In the field for Sales Rate/Price, add the discount in the form of a negative amount. Make sure it is not a percentage but an amount.
  • From the drop-down menu for the Income account, choose the Discounts Given account which has been created by QuickBooks when the discount settings were turned on by you.
  • Choose the right tax rate to ensure that the discount is non-taxable.
  • When it is complete, press Save and Close.

Step 2: Include the Discount Item in Your Particular Sales Form

  • Choose + New
  • Choose Quote, Invoice, or Sales Receipt
  • Now, include the discount item you just prepared in the Product/Service column. You can change the discount if required to make sure it is a negative amount.
  • Complete the remaining form.
  • When you are all set, choose Save and Close or Save and Send.

We hope that this article was enlightening for you to answer your queries concerning setting up a sales discount account in QuickBooks. Still, you may get stuck anywhere or get confused in some of the processes. Connect with Dancing Numbers team via LIVE CHAT.

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