Adding discount using Journal Entries endpoint
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Written by Ali Kiassat
A discount is the reduction of either the monetary amount or a percentage of the normal selling price of a product or service. For example, if a discount of $100 is given to the buyer on a sale of $1,000, the Accounts Receivable Account is debited for $1,000 to reflect the amount owed by the buyer for the sale, the Sales Discount Account is credited for $100 to reflect the amount of the discount, and the Sales Revenue Account is credited for $900 to reflect the net sales revenue after the discount is applied.
Accounting Example:
A billed Invoice with a 10% discount is created:
| Parent Account | Account | Transaction / Reference | Date | Debit | Credit |
| Accounts Receivable | Accounts Receivable | Invoice | Jan 1, 2022 | 9.00 | - |
| Revenue | Discounts | Invoice | Jan 1, 2022 | 1.00 | |
| Revenue | Sales | Invoice | Jan 1, 2022 | - | 10.00 |
Leveraging Railz to use Journal Entries to add discounts:
You may follow the below steps to add a discount as Journal entry:
-
Determine the accounts to be debited and credited: In a discount transaction, the account to be debited is typically the accounts receivable account associated with the sale, and the account to be credited is usually the sales account.
-
Post a new journal entry with the appropriate accounts to be debited and credited.
-
Enter the discount amount: Input the discount amount in the appropriate field of the journal entry.
-
Include any additional information: You may want to include additional information in the journal entry such as the reason for the discount and any other relevant details.
Payload example:
You can use our POST /journalEntries endpoint to add a $9 debit line item, for example, from the Accounts Receivable account, $1 from Discounts account and a $10 credit line item, for example, for the Sales Revenue account.
{
"connection":
{
"businessName": "{{businessName}}",
"serviceName": "{{serviceName}}"
},
"data":
{
"currency": "USD",
"currencyRate": 1.3,
"postedDate": "YYYY-MM-DD",
"lines":
[
{
"accountRef": "ID OF ACCOUNTS RECEIVABLE ACCOUNT FROM ASP - SEE COA END POINT ",
"description": "LINE ITEM DESCRIPTION",
"amount": 9,
"type": "debit"
},
{
"accountRef": "ID OF DISCOUNTS ACCOUNT FROM ASP - SEE COA END POINT ",
"description": "LINE ITEM DESCRIPTION",
"amount": 1,
"type": "debit"
},
{
"accountRef": "ID OF SALES ACCOUNT FROM ASP - SEE COA END POINT ",
"description": "LINE ITEM DESCRIPTION",
"amount": 10,
"type": "credit"
}
],
"memo": "SOME MEMO"
}
} For more information:
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