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Set Up Items to Track Various Promotional Allowances

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  • Rustler
    Ask four accountants this question and there will be five answers IMO.

    I look at it as a sales discount and it should affect gross sales on the P&L IMO. Using an item on a CM to post to an income account called promotional sales discount would work.

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  • JeffW012
    started a topic Set Up Items to Track Various Promotional Allowances

    Set Up Items to Track Various Promotional Allowances

    Several of our customers have multiple promotional programs that they want us to participate throughout the year, and some of these overlap one another. The customer gets a percentage discount on their purchases that are used in the various promotional efforts, but we don't know which promotions, IF ANY, the orders are for when the orders are placed. The customers reduce what they pay on the invoice based on what promotions the products were used for. For example, a customer may take a 10% deduction if products will be used for a new store or remodeled store, a 3% deduction for products purchased during specific dates, 2% if products will be part of a promotional display, etc.

    The simplest thing to do is just record all of these as "sales allowances", but that is the same place that returns, defectives, damages are recorded. I believe the customer discounts for various promotions should be recorded as marketing expenses instead. I think the right way to do this is to set up each promotion (the large ones) as an item in QB and then issue credit memos to be applied to invoices (invoices that the customers short pay in their claims for promotional allowances), so we can see how much each promotion costs us throughout the season or year. AM I CORRECT?

    Thanks in advance for your help!