by Bob Smith » Wed Jan 14, 2009 11:34 pm
There are two schools of thought on that and you hit them both.
What I prefer, and what I believe to be the proper way, is to put the coupon discount into advertising expense. The main reason being that you don't want your percentages affected negatively on an already, lof especially, low margin operation. If you apply the coupon to the sale then margins are reduced. Most manufacturers generate reports comparing you to other dealers in your district, zone, etc., and reduced margins due to coupons will render the comparison useless. Not important in some operations I know. If you hold managers to task though and margins are a concern, then flag the discount as an expense.