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Record a Vendor Rebate

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From time to time you may receive a rebate from a supplier, either as a credit against your vendor account to apply to outstanding invoices, or as a payment into your bank account.

 

You must first decide how you want to account for the rebate – either as a credit against a 5-XXXX Cost of Goods account in your general ledger, or as income reported against a 4-XXXX Income GL account. This decision will also affect how the rebates are reported in GST sessions (your BAS).

 

Recording Vendor Rebates as Income Reported Against a GL Account

On the ribbon go to Tools > Setups > Accounting > Stock GL Group and add a stock GL group, type non depleting, journal, and select the Rebate GL account in both fields, then click Save.

 

rebate accounts

 

Add a stock record for Vendor Rebates, ensuring you select type Non Depleting.

 

rebate stock

 

Add a job and invoice your supplier for the rebate. Enter the payment as normal.

 

Info

You may want to discuss this with your accountant, or refer to your previous system to see how you previously recorded vendor rebates.

 

Recording Vendor Rebates as a Credit to COGS

If you want vendor rebates reported as a credit in the 5-XXXX COGS area of the general ledger to reduce your overall cost of sales, simply add a negative expense PO to the vendor, and select the required 5-XXXX account (Purchases > Add Purchase > Type – Expense and make negative by putting a minus sign (-) before the amount).

 

Info

You need to add a new GL account, eg. 5-XXX Vendor Rebates, make it an expense PO account, and set a default tax code of G.

 

Vendor Rebate GL add

 

Vendor Rebate GL showing

 

Recording Vendor Rebates as Income

If you want vendor rebates reported as income against a 4-XXXX Income GL account, then you must invoice the supplier for the rebate so it reports as a sale, and therefore income. You must add a journal stock pointing to an income account (you may need to add a new income account and journal type stock GL group for this purpose).

 

Edit the card file, and make the vendor a customer as well as a vendor. Add a job, and invoice them for the value of the rebate. Then edit the debtor account, and add a Creditors Contra to pay the invoice, and move the value to the creditor account where it will appear as a credit to apply to invoices.

 

vendor rebate

 

Tip

You will see some letters underlined in the field names within the header, eg. Type. Using Alt+ the underlined letter will jump you to the field beside that heading.