It is common for customers to receive discounts or apply coupons when placing an order. Such discount items are often included as parts of the invoice. On Leapfin Platform, configurable rules are available to handle journal entries related to discounts.
Bundling, or Standalone Selling Price (SSP) handling, refers to a transaction scenario where a discount is applicable only if a set of goods or services is purchased together. For example, "buy one get one free", "$50 off for over $200 purchase", etc. In such case, the accounting principle requires the bundle discounts to be allocated proportionally based on the standalone selling price of each item.
Though the discounts, once allocated, can be handled on Leapfin Platform, the "bundle discount allocation" feature is not available yet. Custom development work is required to calculate discount amounts for each item within a bundle.
|calendar date of when the discount item is issued|
|full amount of the discount item to be collected|
|debit account for discount. e.g. Accounts Receivable.|
|credit account for discount. e.g. Revenue, Deferred Revenue|
John bought a $30 drill from Lowe's and used a $5 coupon on the order.
Event #1: discount is invoiced
Lowe's issues an invoice contains two items: the cost of the drill, and the discount applied. Leapfin will create 3 financial records in this case:
- an Invoice record, representing the invoice
- a Line-item record, representing the purchased drill
- a Discount record, representing the discount applied
When the discount is issued as parts of the invoice, say on 01/01/2022, the following journal entry will be generated on the Discount record.
|Date||Account||Debit Amount||Credit Amount|
Updated 6 months ago