Early payment discount
My vendor gives me 5% if I pay within 15 days. His invoices always include freight. I enter the entire invoice amount in the bill pay section of QuickBooks and since I have the terms pre-set, the discount is taken on the entire invoice amount. After 15 years, the vendor says this is incorrect, I should only take the discount on the net (merchandise) amount. But is this the standard? I can’t just discount part of an invoice in QuickBooks, as the terms apply to the entire invoice amount.
So I’m in agreement with you that this is not standard practice. However, if a vendor is giving you a discount (at all) it is a good thing. Therefore, I recommend that you remove the discount terms (or override the discount amount) when you pay the bill.
Assuming that you are using QuickBooks desktop, go to the pay bills window and select the bill. By putting a checkmark next to it. At the bottom of the screen you should see a button that says discount. It will be located to the right of Go to Bill. Click on that button and enter the correct discount amount.
Thanks so much for reading!
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