Payment Discounts

[P. J. Nelson]

We offer payment discounts to our customers. Is there a report for sales tax purposes that reflects payment discounts taken? The "Taxable/Exempt Sales" report lists the invoices before discounting, thereby overstating both the sales and sales tax due. In addition, is there a way in receipts to apply the discount taken to both the sales and the sales tax?

[bkpr913]

I haven't seen any evidence that Peachtree will do what you want. In the meantime, you might want to print out your discount g/l account each month and adjust your sales tax manually.

[jquest]

I needed to extract similar information for determining what to pay our sales rep and was surprised to find that I could not get a total of paid discounted invoices.

(This is a long-winded detailed explanation of my workaround. I'm not entirely sure it will be of help and I wouldn't be at all surprised if there is a much better way to do it . . . )


Here's what I do to get an amount that reflects the total discounted amount paid to us in a given period.

I go to Reports-Accounts Receivable-Cash Receipts Journal

Under "Options" I select the Date Range I want.

Select the "Fields" Tab. At this point, I check Transaction Reference, Line Description, Transaction Date and Transaction Amount as DR/CR (This is the important one).

This gives me a report of each transaction. The ones where the purchaser took a discount say: Discount Taken and then an amount is displayed. Below this amount is the balance from the original invoice total. - Unfortunately, these two important pieces of information are displayed one above the other rather than side by side<that would have made it easier to total either column>.

I then export this to Excel.

In Excel, I insert a row between each separate transaction for clarity.

In the second column (B), the phrase "Discounts Taken" appears anywhere a customer took a discount when paying an invoice.

In the fourth column (D) are two amounts for each transaction. One is the amount of the discount, the other is the balance paid after the discount.

I add a 5th column, column F. In it I write the following function:

(Assuming we are in the 3rd row of the spreadsheet)

=IF(B3="Discounts Taken",D3,0)

I copy this formula all the way down column F to the last transaction.

Then I SUM that column. This gives me the total amount of discounts taken in the given time frame.

I take the exported total at the bottom of either the "Debit Amount" column or "Credit Amount" column and subtract the discounted amount I SUMMED to get the total amount paid after discounts.


I hope this helps more than confuses.

John

[tap1946]

P.j.

I'm not a tax expert; but I don't believe in my state that discounts granted to customers for early payment are deductible from sales for sales tax purposes. At least, I've not seen it done before. For sales tax purposes, "sales" are the full amount of the invoice less freight charges.

Assuming some "bean-counter" influence during the software writing process, that's probably why PT reports don't offer what you're looking for.

You may want to take those discounts into consideration; but you may also be opening yourself up to a future assessment if you are ever audited. I'd find out the rules in your state before I did this.

Tom

[pamhydra]

Definetly check out what the law is in your state regarding this issue. In NJ, sales tax must be paid on the original amount of the invoice, regardless of whether an early payment discount is given or not. (http://www.state.nj.us/treasury/taxation/pdf/pubs/sales/anj9.pdf)