How to Record a Discount in the Check Register of QuickBooks

A discount is a reduction in a total invoice amount. Discounts normally appear on an invoice and apply to items such as wholesale or volume purchases, or early payment of a credit balance. There may be times, however, when you need to record a discount in the check register of QuickBooks. If your company incorrectly invoices a customer, the customer will many times send in a check that reflects the correct invoice amount. To correct the error and properly credit the customer, you can split the transaction by first recording the total invoice and then applying the discount.

Instructions

1. Open the check register. Click the “Banking” tab on the QuickBooks main menu and select “Use Register.” If you have more than one register, select the correct register from the drop down list and click “OK.”

2. Fill in check details to include the date, name of the remitter, and the invoice amount (not the amount of the check).

3. Click the “Splits” button on the bottom left corner of the register screen to split the transaction. On the first line, select “Accounts Receivable” from the Account drop down list and select the customer name from the Customer:Job drop down list. On the second line, select “Discounts Given” from the Account drop down list, enter the amount of the discount by entering the dollar amount of the discount as a negative amount, such as -100.00, and select the customer name from the Customer:Job drop down list.

4. Click the “Recalc” button to adjust the check amount, click “Close" to close the Split window, and click the “Record” button to record the transaction.

Tips & Warnings

• When you install QuickBooks, the basic Chart of Accounts QuickBooks establishes contains a general Discount account. If you require more information to track discounts, such as separating volume purchase versus wholesale discounts, create Discount subaccounts. Select “Lists” from the QuickBooks main menu, then “Item List.” To create a new discount item, click “New” and select “Discount” from the drop down box. Give the discount a name, place a check mark in the “Subaccount” box and link it to the Discount account. Finally, link the discount subaccount to the general Discount account.

• Entering discounts in the QuickBooks register is not the preferred method for handling these transactions. Be sure to correct invoicing errors to eliminate having to enter discounts in this way.

References

• “QuickBooks 2009: The Official Guide;” Kathy Ivens; 2009

Resources

• IStaff.ISta-in.org: QuickBooks Quick Reference Guide