Received money/discount

I received a cashback from a website i used for registering my phone. How do I add this to my account? Do I have to use some like debet or is there a better way for it?

  1. Create some revenue account.

  2. Dt: cash/Bank with amount received
    Ct: The revenue account with amount recieved

You may not even need to create the additional revenue account, especially if this cash back is a one-time thing. If you already have an expense account related to the purpose, something like Telephone expenses, you can credit it instead of a revenue account. Normally, of course, entries to expense accounts are debits. But in this case, the credit is similar to a return of a purchase. (When you bought the item, you would have debited the appropriate expense account. When you return it, you credit the same account.)

Different accountants could have different opinions about such contra entries. They do not make sense when the purpose of the expense account is a lot different from the refund received. But the financial effect is the same as @Abeiku’s revenue account approach.

Thanks for your answer. The “problem” is that I purchased my phone contract at T-Mobile. Through a specific website there was an action I could make use off that will give me a € 20,- money in return.

I received it at my bankaccount. The name of the Company I received it from is Cashback XL… When I make a credit at the account “telephone expenses” it won’t be added to my bankaccount.
Am i missing something?

Yes, it will be in your bank account. The only way to enter money coming into the company is to use Receive Money in a cash or bank account. So the bank account is debited automatically by Manager. When you choose an account to allocate the receipt to, you are selecting which account will be credited.

In the situation you describe, my judgement would be that the cash back isn’t really a refund of telephone expenses, so probably shouldn’t go into a Telephone expenses account. But it’s also a one-time event and a fairly small amount. So rather than create a special income account that will likely never see another entry, you could put it into a Miscellaneous income account. I think every business should have one of those for the small transactions where you cannot figure out anything else to do with them. From an audit or tax perspective, you will be fully covered, as all will be documented.

Ok, just to be sure;

I went to the right bankaccount and chose: receive money.
I’ve chose the date I received the money and at payer I chose: CashBack XL
At account I chose the miscellaneous income account, entered the amount and the tax code and chose create.
Is that all?

(By the way, thank your for your help)

Note: I merged your separate “Edit” topic to this one, since it is a continuation of this discussion.

I’m not sure why you would need to designate a tax code for receipt of this reward/refund/promotion (or whatever it is). Frequently, tax codes apply to sales tax or VAT that are figured on the amount sold. But then, I don’t even know what tax jurisdiction you might be in, so feel free to ignore that concern.

Having said that, what you describe sounds correct. The cash back amount should now show in your profit & loss statement as income. That is where you will be taxed if your jurisdiction has income tax. What that will mean is that your telephone expense, which would otherwise probably be tax-deductible, won’t be to the extent of the EUR 20.

The cashback itself should communicate any tax implications but more importantly, whose name is the cashback in. If it’s in your personal name, even though it may have been registering a business phone then the monies don’t need to be banked into the business. The monies belong to the payee.

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Very good point.

Thank you for your response. It wasn’t my purpose to create a new topic, must have done that by accident.
The support here on manager is amazing. Thanks!