It may happen that if your clients are physical people and not companies, that you\u2019re giving away coupons at some point. How should you treat them however?<\/p>\n
In essence what a coupon is, it\u2019s a promise that in future, against this coupon you will give away something either for free or with a cheaper price. So in your accounting if it\u2019s anything, it\u2019s an expense.\u00a0<\/p>\n
However, initially, when first giving the coupon either in a newspaper or a magazine or some other place, you don\u2019t account for anything. You wont take on a liability as a promise to give something or an expense. The first and only accounting entry when dealing with coupons comes when one is presented to you.<\/p>\n
Say that a client is making a purchase by you; he is buying something worth of 100 and your coupon says that when buying something worth of at least 50, they will get a discount of 20%. Your accounting entry is as follows:<\/p>\n
Cr Sales revenue 80 (initial price of 100 with 20% discount is 80)<\/p>\n
Db Account receivables 80<\/p>\n
Your sales revenue could be a 100, however, since you gave away a coupon with a promise to give 20% discount, your sales revenue is less than a 100, it\u2019s 20% less.<\/p>\n","protected":false},"excerpt":{"rendered":"
It may happen that if your clients are physical people and not companies, that you\u2019re giving away coupons at some point. How should you treat them however? In essence what a coupon is, it\u2019s a promise that in future, against this coupon you will give away something either for free or with a cheaper price. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,78],"tags":[],"class_list":["post-4588","post","type-post","status-publish","format-standard","hentry","category-2-processes","category-2-8-revenue-and-receivables"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t