# The problem of price calculations **URL:** \ **Category:** Uncategorized\ **Created:** [September 28, 2016, 12:35pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221 "2016-09-28T12:35:52Z")\ **Posts on this page:** 14\ **Page:** 1
**Author:** ![Dado](https://avatars.discourse-cdn.com/v4/letter/d/85e7bf/32.png) [@Dado](https://forum.manager.io/u/Dado)\ **Post date:** [September 28, 2016, 12:35pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/1 "2016-09-28T12:35:52Z")
Why do you put a “discount” on the incoming invoice and sales invoice. Discount can go on outgoing invoice but not on the incoming invoice. On incoming invoices need to be added margin in relative and absolute terms, because this is a calculation of the price of goods at the entrance to the stock. Thanks for your reply. ---
**Author:** ![Brucanna](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/brucanna/32/1960_2.png) [@Brucanna](https://forum.manager.io/u/Brucanna)\ **Post date:** [September 28, 2016, 12:48pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/2 "2016-09-28T12:48:48Z")
You maybe offered discounts for early payments, say 5% if paid within 7 days. So if you want to take up that offer then you need to calculate that discount on the invoice ---
**Author:** ![Dado](https://avatars.discourse-cdn.com/v4/letter/d/85e7bf/32.png) [@Dado](https://forum.manager.io/u/Dado)\ **Post date:** [September 28, 2016, 12:57pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/3 "2016-09-28T12:57:36Z")
I’m not sure we understood. Where do you enter in your accounting 5% discount from the supplier. ---
**Author:** ![Brucanna](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/brucanna/32/1960_2.png) [@Brucanna](https://forum.manager.io/u/Brucanna)\ **Post date:** [September 28, 2016, 1:05pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/4 "2016-09-28T13:05:06Z")
On the Purchase Invoice - when entering the details ![](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/f/fa79335bcc51ae7ac7de9d0987120f006134cefd.jpg) ---
**Author:** ![Dado](https://avatars.discourse-cdn.com/v4/letter/d/85e7bf/32.png) [@Dado](https://forum.manager.io/u/Dado)\ **Post date:** [September 28, 2016, 1:11pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/5 "2016-09-28T13:11:26Z")
Accounting is based on the facts not on assumptions. Assumptions are based on the analysis, not on facts. Discount of 5% supplier entries in his accounting, not in my accounting. ---
**Author:** ![Dado](https://avatars.discourse-cdn.com/v4/letter/d/85e7bf/32.png) [@Dado](https://forum.manager.io/u/Dado)\ **Post date:** [September 28, 2016, 1:19pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/6 "2016-09-28T13:19:54Z")
I mean that on the Purchase Invoice should be indicate the percentage increase in prices, not decrease the cost. ---
**Author:** ![Brucanna](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/brucanna/32/1960_2.png) [@Brucanna](https://forum.manager.io/u/Brucanna)\ **Post date:** [September 28, 2016, 1:24pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/7 "2016-09-28T13:24:16Z")
The Supplier sends you an invoice for 100 with terms of 5% discount if paid within 7 days. Supplier doesn’t know if you are going to pay 100 or 95 until they get the money You may or may not have enough money within 7 days to pay. These are all assumptions until an actual action occurs. Accounting is full of assumptions - depreciation guesses the life of an asset, provisions like doubtful debts guesses that a percentage of accounts receivables wont be collected - the list goes on. ---
**Author:** ![Dado](https://avatars.discourse-cdn.com/v4/letter/d/85e7bf/32.png) [@Dado](https://forum.manager.io/u/Dado)\ **Post date:** [September 28, 2016, 1:42pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/8 "2016-09-28T13:42:32Z")
You continue to put an equal sign between the input and output accounts. These are two different accounts, input account should have the option price increases, and the output account price reduction. ---
**Author:** ![Brucanna](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/brucanna/32/1960_2.png) [@Brucanna](https://forum.manager.io/u/Brucanna)\ **Post date:** [September 28, 2016, 2:05pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/9 "2016-09-28T14:05:20Z")
> [@Dado](#): > > You continue to put an equal sign between the input and output accounts. And why not - discounts are an incentive on both sides. Discounts don’t become penalties Double entry accounting requires equal signs to balance. If the supplier offers a variable discount then the customer takes the discount subject to meeting to the number of days payment terms being met. You can’t have a supplier offering a variable discount and the customer paying a penalty (increase) as the customer may not take up the variable discount offer - so just pays the full cost. ---
**Author:** ![Dado](https://avatars.discourse-cdn.com/v4/letter/d/85e7bf/32.png) [@Dado](https://forum.manager.io/u/Dado)\ **Post date:** [September 28, 2016, 2:27pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/10 "2016-09-28T14:27:30Z")
Well, as you get the difference in price. The difference between the price on incoming invoices and invoices, your price difference, or your earnings, and leads to a gross margin account (difference in price). I ask you again, where you are in his books run discounts from suppliers by 5%. If you are in your books, you post a discount when purchasing goods then have undervalued stocks in the warehouse. What is the point of view of illegal accounting. I apologize for the lack of knowledge of English. ---
**Author:** ![Tut](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/tut/32/3286_2.png) [@Tut](https://forum.manager.io/u/Tut)\ **Post date:** [September 28, 2016, 2:35pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/11 "2016-09-28T14:35:05Z")
> [@Dado](#): > > If you are in your books, you post a discount when purchasing goods then have undervalued stocks in the warehouse This is not true, @Dado. If you paid less for whatever reason, the cost of inventory in your warehouse is less, no matter why you paid less. Remember, your cost of goods sold does not relate to their potential sale price. It could be lower for several reasons: - Lower offered price from supplier - Discount for rapid payment - Discount for buying larger bulk quantities - Stock purchased from bankrupt competitor at liquidation auction All of these are legitimate savings to your company and will increase your margin. ---
**Author:** ![Brucanna](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/brucanna/32/1960_2.png) [@Brucanna](https://forum.manager.io/u/Brucanna)\ **Post date:** [September 28, 2016, 2:48pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/12 "2016-09-28T14:48:59Z")
If the product invoice cost is 10 and you pay 9.50 after taking time payment discount then your warehouse cost is 9.50. That’s not undervaluing your stock as its showing the actual cost of the stock. To show the stock at 10 could be overvaluing the stock. If the supplier gave a fixed discount on the invoice then the product would be 9.50, the payment would be 9.50 and the warehouse value would be 9.50. Where is the undervaluing. Alternatively, you could take up the variable discount as an Income - Discount Received ---
**Author:** ![Dado](https://avatars.discourse-cdn.com/v4/letter/d/85e7bf/32.png) [@Dado](https://forum.manager.io/u/Dado)\ **Post date:** [September 28, 2016, 3:02pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/13 "2016-09-28T15:02:26Z")
Yes, you’re right. But this is not your discount, but discounts from suppliers. You do not have the discount but the price difference was positive or negative. If it is positive you’ll make a profit, if it is negative you ostvarujte loss. To me wrong does not understand. The biggest problem with softverma accounting for the management of stock in the warehouse. I am interested in your software, or some things we need to correct. ---
**Author:** ![Ealfardan](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/ealfardan/32/63166_2.png) [@Ealfardan](https://forum.manager.io/u/Ealfardan)\ **Post date:** [January 18, 2023, 3:30pm UTC](https://forum.manager.io/t/the-problem-of-price-calculations/7221/14 "2023-01-18T15:30:50Z")
Closed on January 18, 2023, 3:30pm UTC