allocation of coupon discount

[dwhite]

WHAT IS BEST PRACTICE OF ACCOUNTING OF DOLLAR VALUE OF COUPON DISCOUNTS
A) CHARGE AS EXPENSE TO SERVICE ADVERTISING
OR POSSIBLY SHARED WITH PARTS.
B) CHARGE BACK TO CUSTOMER PAY PARTS COST OF SALE.

[robc]

I prefer hitting cost of sale on a prorated basis that makes sense with the sale amount and differences in grosses between the departments.

But if you prefer to track the impact of the discounts and won't delude yourself on results pre-coupons then advertising (again split as noted above) is what many shops use.

Of course I think many times that decision is based more on the manager's pay plan than anything else.

[bajaman]

If it is a straight dollar off discount we charge the discount back to labor gross. If it is a percentage off total service it is prorated based on parts and labor with the labor charged back to labor gross and the parts portion going to parts advertising. Parts manager gets very upset at haveing to participate at all but service absorbs about 90% of the discounts and pays for all advertising.

[texaslp]

That's interesting that you charge the service portion to labor but the parts portion to advertising.

[MovingForward]

We split everything 70/30 service and parts. We used to charge everything back to cost of labor and cost of parts but it was creating a issue on our financial with ro counts. We are now doing it right on the repair order. We created a op code and ad and addtional line. We then use a house tech and do negative labor dollars only, not time and parts uses a part number we created and sells the part at zero cost with a negative sell price.