Some suppliers provide bonuses and incentives if you've met certain goals and as a result, they write you a rebate or bonus check. For example, if you sell 100 cases of a specific product over the course of a quarter you may receive a rebate on that product. So, when this happens, how do you apply it to the cost of the products?
You do not want to change the original PO / invoice as it needs to match the invoice they sent you, a check has already been cut and it needs to match! You often times DO want it to affect the COGS on products that were sold.
Here's our suggestion wrapped in an example: you got a $10 per unit rebate on the 100 units you sold ($1,000 check from the supplier). You originally paid $150 per unit.
Create a new PO for that supplier > add the products in question, set the quantity on the PO to be NEGATIVE 100, set the cost to be $150. Add the same product to the PO a second time, set the quantity to be POSITIVE 100, set the cost to be $140.
The net result of the PO should be negative $1,000 thereby reconciling to the rebate check. COGS should be updated for the last 150 units (in stock or sold). Adjust the date on the PO depending on how you want the costing to be applied. It's that simple!