How to add a Discount as a Journal Entry | Accounting Data as a Service™ Help Center

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: