Add a Vendor Discount to a QuickBooks Desktop Purchase Order

QuickBooks Desktop lets you put a discount line on an invoice, but a purchase order has no discount item and no discount field. That surprises buyers who negotiate a percentage off with a vendor and expect the order to show it. The software is not broken; it treats purchase orders differently by design. Here is what it will not do, and two approaches we recommend.

Why can’t a discount item go on a purchase order?

The Discount type in the item list belongs to sales forms. It reduces the bottom line of an invoice or sales receipt by a percentage or a fixed amount, and posts the difference to a discount account. A purchase order is a non-posting document. It records an intention to buy, moves no money, and touches no ledger account, so there is nothing for a discount to post against. An order line simply will not take the item.

Edit the unit price on the order

The direct route is to type the discounted price into the item line itself. Work the percentage out per unit first. As a plain example, a ten percent discount on a part listed at $40 makes the order price $36, and the order total then matches the deal. Editing the price also puts the saving on the printed or emailed order, which keeps the document honest for the vendor’s files.

Keep a note of the list price if you need it later, because the order now carries the net figure.

Record the saving on the bill

The bill is the transaction that actually posts, so many firms leave the order at list price and take the discount at billing time. When you enter the bill from the order, the program copies the order amounts across, and you can adjust the figures before saving. If the vendor bills the full amount and credits the difference later, enter the bill as billed and post a vendor credit against it. Either way, the payable rather than the order carries the true cost.

Does the order price change inventory value?

A purchase order never values stock by itself. For inventory items, value settles when goods are received and when the bill posts, using the program’s average costing. Whatever figure those documents carry is the figure that flows into stock. If the discount is a real cut in the cost of the goods, put the lower price on the order or the bill and your inventory value follows it. If it is really a rebate, keep the order at list and use the credit route instead.

A routine that keeps it consistent

We suggest picking one route and staying with it. If the discount belongs in item cost, retype the unit price before you print or email the order, then match the bill to the same net figure. If it is a rebate or settlement, leave the order alone and book the credit when it arrives. Before the next discounted order, agree with the vendor which kind of discount it is, because that one answer decides which route to use.