Vendor Discounts

Problem

handling supplier discounts in MacNail construction accounting software
lumberyard discount for early payment, combined with sales tax

Diagnosis

handling supplier discount in MacNail accounting software
1. by distributing it through all jobs
2. by considering as office income RECOMMENDED

Solution

1. Include discount in master index--see manual, p 62. What it doesn't show there-- if they have BOTH sales tax and a discount, multiply the multipliers. E.g. if 7% sales tax and 2% discount, put in =1.07*.98 (can do a formula like that) or 1.0486
2. Put it in as a line item with a negative cost, assign to office job. Interest (IN) is a good category to put it in under-- it will then show up as a negative cost in office cost control

we like #2 best, because
1. you don't always prepay and get the discount, and
2. philosophically it's kind of like interest that you earn for paying early, and might as well take it as general income, offsetting overhead costs (especially for T&M work)

Comments

Entered 8/28/95 by Dennis. Updated 11/10/2010.