now we will learn how to record discounts that are calculated as a percent of the items that
were sold we offer a different kind of discount to our employees all employees will receive a
three percent discount from any service that they purchase from us this means that we have to put an
expense in the chart of accounts called employee discounts it also means we have to put an item on
the items list called employee discounts from the main menu click list chart of accounts in
the bottom left click account new in this case we will also choose expense as the account type click
continue and in the account field name make sure your cap locks is on and type employee discount
discounts when we click Save and close employee discounts has been added to the chart of accounts
now we have to put the item from the main menu click list item list in the bottom left click
item new a discount item is type discount it's a special type of item just for discounts click
in the name and type in employee discount now this time after you remove the zeros you type
3 and put in the percent symbol if you put in the percent symbol QuickBooks knows this is not going
to be a flat money amount this is going to be a percent of the item that we sell when we click the
account pull down arrow we will choose employee discounts to be associated with this item when
we click OK we now have another item on the items list and you can see this item is another discount
type of item and it's called employee discount on March 2nd Holden did ten editing hours for
candy she paid cash less the employee discount from the main menu click customers enter sales
receipts the date was March 2nd she paid cash it was customer candy let's make sure that this gets
deposited to undeposited funds because if you get cash you have to bring it to the bank later
the item I believe was editing so we're going to put that and the quantity was 10 when we push tab
we have a sales receipt for $1400 directly under the editing item we will click and we will choose
employee discount notice QuickBooks multiplied the $1400 editing job times 3% and QuickBooks
determined that candy is entitled to a 42 dollar discount therefore the amount of cash she has to
pay is only one thousand three hundred and fifty eight dollars when we click Save and close we can
open up our trial balance and see that employee discount will show up for the first time as 42
dollars sometimes we will give a discount for an entire invoice not just one item in a case like
that we have to follow several steps to set up the file to be able to do that step one add an
item to the items list called subtotal step to make the invoice with several items step three
put the subtotal item under the normal items that we sell step 4 but the discount item under the
subtotal because the subtotal item gets the total of the entire invoice then the discount item will
take a percent of the subtotal first let's take a look how to set it up from the main menu click
list item list in the bottom left click item new the type of item is subtotal and the name will
also be sub total it's a very simple item all it does is give you the subtotal of the items
that are listed above it on an invoice or a sale receipt then you click OK and you're ready to go
now let's imagine on March 3rd we gave Alan an employee discount for two items we gave Alan an
employee discount for nine video and six editing if it's on account we're gonna make an invoice we
open the invoice window and of course the date the sorry the customer is Alan and the date is
March 3rd we said that the items were nine video and six editing so let's put that on
the invoice video quantity nine editing quantity six so this is the weight that the invoice would
look without the discount now under the items we have to put the subtotal item the only thing the
subtotal will do is add the items above without the discount this invoice would be three thousand
five hundred forty dollars now we put the discount item directly under the subtotal when we choose
employee discount it takes three percent off of the subtotal this way the entire invoice is
being multiplied by the discount percent and the entire invoice every item is being discounted by 3
percent notice the discount amount is 106 dollars and 20 cents and the balance of the invoice
decreases to 3400 $33.80 when we click Save and close we can look in the trial balance and we
see that the employee discount is now up to one hundred and forty eight dollars and 20 cents when
we double click we see the reason is we had a sale receipt to candy where we gave her a 42 dollar
discount we had an invoice to Allen where we gave him 106 dollars and 20 cents discounts and that's
the reason why the employee discount in total is a hundred and forty eight dollars and twenty cents