Rappel on purchases

accounting

A purchase rebate is a discount rate applied to a particular volume of purchases by a company calculated on a one-year basis. The provider guarantees its application to its buyers if they reach a certain level or volume of purchases during said period.

By definition, it is often understood that a rebate is a commercial discount based on a certain volume of orders from another company. The application of the rebate on purchases supposes the loyalty of the client company, mainly.

If the sales were made to the end customer, we would be talking about another similar concept, that of rebate on sales. Both cases must be taken into account in the company's accounting.

The main idea that this type of operation raises is to bring client companies to higher consumption levels than usual. It is an incentive for potential customers to consume or buy a little more than normal and benefit from it through a discount.

The most common is that the commercial discount applied is directly related to the volume of spending in which we move. In other words, there is a directly proportional relationship between spending by the customer (expressed through a volume of purchases) and the discount that will be applied by the supplier company.

For accounting purposes, a purchase rebate can be applied on the same invoice or after the purchase. As we have said, the most common is that it is applied at the end of a certain period of time, which is usually one year (although also quarterly or semi-annually) and in order to facilitate companies and / or clients their year-end. .

Any of these application modalities will have an effect on the accounting methodology, taking into account in turn whether it is about payments made, pending or any other type of related circumstance.

Example of rappel on purchases

A simple example of rebate on purchases is that carried out by mechanical and industrial washing shops. For a year they offer the possibility of performing 10 commercial vehicle maintenance operations to companies in the sector on the condition that if the number 10 is reached before the end of the year, said last operation is carried out free of charge or at a lower cost.

In this way, the company guarantees a volume of work, loyalty to the client company and offers the latter the possibility of reducing its annual expenditure on car washes.

Tags:  finance accounting biography 

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