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.

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.

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.

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.

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.

I agree with RZinner.