Rebates


D

DoubleJava

I need help with how to enter rebates into Office Accounting 2007 Pro. I
have several different scenarios:

SCENARIO 1
I purchase items for inventory directly from distributor DDD. The DDD
distribution company directly pays me a cash/check rebate based on some
promotion that they are currently running. In this case, DDD is a vendor of
mine.

SCENARIO 2
I purchase items for inventory directly from distributor DDD. Some of the
items purchased are manufactured by company MMM. The MMM manufacturing
company pays a cash/check rebate directly to me. In this case, MMM is
neither a customer nor a vendor of mine.

SCENARIO 3
I purchase goods (some for inventory and some for expenses) using a company
credit card that is issued by the CCC bank. The CCC bank pays a yearly
cash-back award, which is based on a percentage of all purchases that are
made using the CCC credit card. At the end of the year, the CCC bank credits
my CCC credit card with an amount equal to the amount of cash-back earned.

SCENARIO 4
I purchase goods (some for inventory and some for expenses) using a company
credit card that is issued by the CCC bank. The CCC bank has a special
arrangement with certain vendors, such that these vendors pay cash-back.
Let's say that one of these vendors is the VVV hotel. Let's say that I stay
at the VVV hotel three times within one month and each time that I stay at
the VVV hotel I pay my VVV hotel bill with the CCC credit card. In this
scenario, the VVV hotel will charge the full amount of my hotel bill to my
CCC credit card each time that I stay at their hotel. However, at the end of
the month the VVV hotel will issue a credit to my CCC credit card that is
equal to some percentage of the total amount of money that I spent at their
VVV hotel for the entire month.
 
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L

Lance [MSFT]

Since there is not a screen dedicated to entry of payments received from a
vendor, it usually takes a couple steps to enter these types of transactions.
There are multiple ways to do this, and which to pick depends mainly on your
reporting requirements.

Method 1: Use this if you want the payment transaction to appear in vendor
related reports for this vendor. I'd use this one for your 1st case where
your vendor paid you and maybe for the 4th case where a vendor indirectly
paid you.

Summary:
enter a deposit (or journal) to record the payment received from the vendor
and a vendor credit memo to record what the payment was for (which expense is
being rebated or what sort of income you are receiving). Then you use pay
bills to apply the vendor credit to the payment journal.

Detailed steps:
A. Entering the payment transaciont
Open the deposit or journal form.

Deposit forms steps:
Select the bank account into which the payment will be deposited. Click
underneath the last line to add another line the grid. Select vendor as the
type, select the vendor name in the account column, enter the amount of the
payment in the amount column. Save the transaction.

Journal form steps:
On row one, select finacial account in the type column, select the bank
account where the money will be deposited in the account column, and enter
the payment amount in the debit column.
On row two, select vendor as the type, select the vendor name in the account
column, enter the payment amount in the credits column.
Save the transaction.

B. Enter the credit memo.
Open the vendor credit form (vendor -> new -> credit memo
Select the vendor
In the grid, pick the expense or income account you will use to record why
you were paid and enter the amount. For case 1, the rebate payment reduces
the expense or cogs for the item that is being rebated, so I'd put this into
the expense or cogs account you use for that item. For case 4, this would be
whatever account you use for hotel expenses. Save the transaction.

C. Apply the credit to the payment. (This doesn't change your account
balances, it just keeps the credit memo from appearing forever as unapplied.)
Open pay bill form. The payment transaction should appear in the grid,
check off the line for it. Click in the credits column to open the credits
screen, select the credit transaction and click ok. Verify that the credits
column now shows the amount of the payment. The payment column should now be
zero. Save the transaction.

Method 2: This method will enter a single transaction against the expense
(or income) account and the account you deposit the payment to. No vendor
account is used. The transaction will not appear in any vendor reports. Use
this if you don't care to track who the payment came from. I'd use this for
case 2 where you don't have any other dealings with the manufacturer and
perhaps for case 3, though that could go in with the other method as well.

Open either the journal entry of the transfer funds screen.

If using the journal screen, on line 1, pick financial account for type,
pick the bank account where the payment will be deposited in the account
column, type the amount of the payment into the debit column.
On line two, pick financial account in the type column, In account column,
for case 2, select the expense or cogs account used for the item being
rebated. For case 3, select whatever account you use to track cash back
rewards (probably an other income account). Enter the amount in the credit
column. Save the transaction.

If using a transfer funds form. Transfer funds is just a simple journal
where the transfer from account will get the credit and the transfer to
account will get the debit. So pick the expense account for the item, or the
cash back income account for the bank payment in transafer from account drop
down, pick the bank account where you are putting the money in the transfer
to account drop down. Enter the amount. Save the transaction.

Hope this helps.

This posting is provided "AS IS" with no warranties, and confers no rights.
 
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D

DoubleJava

Thank you Lance; this helps!


Lance said:
Since there is not a screen dedicated to entry of payments received from a
vendor, it usually takes a couple steps to enter these types of transactions.
There are multiple ways to do this, and which to pick depends mainly on your
reporting requirements.

Method 1: Use this if you want the payment transaction to appear in vendor
related reports for this vendor. I'd use this one for your 1st case where
your vendor paid you and maybe for the 4th case where a vendor indirectly
paid you.

Summary:
enter a deposit (or journal) to record the payment received from the vendor
and a vendor credit memo to record what the payment was for (which expense is
being rebated or what sort of income you are receiving). Then you use pay
bills to apply the vendor credit to the payment journal.

Detailed steps:
A. Entering the payment transaciont
Open the deposit or journal form.

Deposit forms steps:
Select the bank account into which the payment will be deposited. Click
underneath the last line to add another line the grid. Select vendor as the
type, select the vendor name in the account column, enter the amount of the
payment in the amount column. Save the transaction.

Journal form steps:
On row one, select finacial account in the type column, select the bank
account where the money will be deposited in the account column, and enter
the payment amount in the debit column.
On row two, select vendor as the type, select the vendor name in the account
column, enter the payment amount in the credits column.
Save the transaction.

B. Enter the credit memo.
Open the vendor credit form (vendor -> new -> credit memo
Select the vendor
In the grid, pick the expense or income account you will use to record why
you were paid and enter the amount. For case 1, the rebate payment reduces
the expense or cogs for the item that is being rebated, so I'd put this into
the expense or cogs account you use for that item. For case 4, this would be
whatever account you use for hotel expenses. Save the transaction.

C. Apply the credit to the payment. (This doesn't change your account
balances, it just keeps the credit memo from appearing forever as unapplied.)
Open pay bill form. The payment transaction should appear in the grid,
check off the line for it. Click in the credits column to open the credits
screen, select the credit transaction and click ok. Verify that the credits
column now shows the amount of the payment. The payment column should now be
zero. Save the transaction.

Method 2: This method will enter a single transaction against the expense
(or income) account and the account you deposit the payment to. No vendor
account is used. The transaction will not appear in any vendor reports. Use
this if you don't care to track who the payment came from. I'd use this for
case 2 where you don't have any other dealings with the manufacturer and
perhaps for case 3, though that could go in with the other method as well.

Open either the journal entry of the transfer funds screen.

If using the journal screen, on line 1, pick financial account for type,
pick the bank account where the payment will be deposited in the account
column, type the amount of the payment into the debit column.
On line two, pick financial account in the type column, In account column,
for case 2, select the expense or cogs account used for the item being
rebated. For case 3, select whatever account you use to track cash back
rewards (probably an other income account). Enter the amount in the credit
column. Save the transaction.

If using a transfer funds form. Transfer funds is just a simple journal
where the transfer from account will get the credit and the transfer to
account will get the debit. So pick the expense account for the item, or the
cash back income account for the bank payment in transafer from account drop
down, pick the bank account where you are putting the money in the transfer
to account drop down. Enter the amount. Save the transaction.

Hope this helps.

This posting is provided "AS IS" with no warranties, and confers no rights.
 

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