Accounts Payable Discounts Earned GL account

We need to change the Discounts Earned GL account (in 1-8) to a Direct Expense GL account and Sage is only allowing an Operating Income account to be used. Is there a way to get around this? Does everyone use an Operating Income account?

  • 0

    Correct - It will not let you change that to an expense account.   We have implmented a monthly process to complete a journal entry at months end.  YOu can either debit your direct job materials, or create a new one and track separately if you wish.

    Hope that helps.

  • 0

    Correct - It will not let you change that to an expense account.   We have implmented a monthly process to complete a journal entry at months end.  YOu can either debit your direct job materials, or create a new one and track separately if you wish.

    Hope that helps.

  • 0 in reply to RZinner

    Thank you so much for your reply! Just to clarify that I'm understanding correctly, wouldn't we be crediting the account? Meaning the Journal entry would be to debit the Income Account it posted to and credit the expense account?  Also, because we aren't applying this discount to a job, I am using a 6000's account (Overhead Expense).

  • 0 in reply to Kelli Hoback

    Yes Correct.  But it's not really an expense.  Any money saved or discounts provided on expenses is considered income.   If you apply to 6000 it's increasing your expenses.  You could move it to Other Income so it's not included in your operation income, just your net income.

  • 0

    We actually create a credit invoice for the amount of the discount (applied to a Job #Discount), which reduces the Materials direct expense balance. The discounts are tallied under the Discount Job # should we need this.  We opted to do it this way in order to have an accurate Materials paid cost  -- Gen Liab insurance audit includes materials in the subcontract labor basis. We get 5% discount from our materials suppliers. If we enter  the discount as income, the Materials balance is that much higher and we are charged our Gen Liab rate on that amount.  This actually adds up, a lot, at audit time.

  • 0 in reply to Sharon S

    That being the case, I would not use the Discount field, but rather just add a line to the invoice for the discount and choose your own expense account.

  • 0 in reply to ghollister

    Hi ghollister - As we enter 200-300 materials invoices a month, it would be too time consuming to apply discount to each invoice; we enter one credit invoice at the time of payment to the supplier. And we want to decrease the amount paid to the materials direct exp line, so that it reduces the materials 5000 line item.  We do not use the discount field, rather the credit invoice is applied to a Job # named discount. If there is an easier way, I'd love it, but this works so far.

  • 0 in reply to Sharon S

    Since your goal is to directly hit the materials expense account and job costs, the credit invoice method you are using now seems to be the best.

  • 0 in reply to ghollister

    I agree with RZinner.