Sign Up
GUIDE

Accounting for Sales Discounts

Accounting for Sales Discounts
 

Introduction

Most e-commerce platforms support the ability to apply discounts to your sales transactions. Greenback provides you with 3 methods to account for discounts.

Updating your Export Preferences

Once you choose the appropriate method from the 3 options below, you will need to modify the export preferences for your connected accounting program in Greenback. To do this simply click the accounting option (calculator) from the left menu and choose the applicable accounting file from the list. From here you’ll see a number of options under “Accounting Preferences”, including the ability to modify your Discount Total preferences.

null

Let's use an example

To better understand the 3 discount methods, we'll use an example that contains two discounts on a single transaction. In this example there is a First Class Shipping Discount and a Membership Discount.

null

“Proportional” Method (Default)

The Proportional method is the default method for accounting for discounts in Greenback. With the Proportional method, discounts will be automatically allocated proportionally across line items during export. For example, the total discounts from the First Class Shipping discount and the Membership discount is $18.64 ($14.99 shipping discount + $3.65 membership discount). With the proportional method, the total discount of $18.64 will be allocated proportionally across all items in the sale.

Let's assume there are two items on this purchase, item A has a price of $45.50 and item B has a price of $33.15 for a sub total of $78.65. In this example, item A is applied a discount of $10.78 and item B is applied a discount of $7.86.

“Line Items” Method

With the Line Item method, all discounts on an order will be bundled together and displayed as a unique line item during export. During export you’ll have the ability to apply the discounts to a single account from your chart of accounts. For example, the total discounts from the First Class Shipping discount and the Membership discount is $18.64 ($14.99 shipping discount + $3.65 membership discount). With the Line Item method, the total discount of $18.64 will be bundled and presented as a separate line item that can be assigned to an account or category from your chart of accounts.

null

“Multiple Line Items” Method

With the Multiple Line Items method, all discounts on an order will itemized out individually during export. During export you’ll have the ability to apply an account from your chart of accounts for each of the discounts on the order. Referencing our example again, with the Multiple Line Items method, the First Class Shipping discount of $14.99 and the Membership discount of $3.65 will both be presented as an individual line item that can be assigned to an account or category from your chart of accounts.

null

Join the world's most advanced pre-accounting system.