proper accounting for coupons

[jazdale]

I knew this thread would eventually explode like the thoughts on gross transfer.

In my travels, for every 100 dealers that I set up discounts, well over 90 of them applied it to advertising.

Not saying this is the right way, just seems to be the way most people handle it.

I'm not sure what the factors are in determining a warranty labor rate increase. But isn't one of the factors your current CP rate?

[sp7128]

discount should go against the sale...otherwise you are encouraging all employees to use coupons/discounts without having any negative effect on there pay...that is if you pay them off of the sale or gross. Put the discount in a sub-account against parts and labor sale then you can actually see what the discount amount is you are giving away, and everyone in the store participates....When the sales depart sells a car they don't book the sale at list and write the difference to advertising...Why because the salespeople usually get paid off the true sale or true gross.

[Old Irish]

Heh heh. We'll still be discussing this years from now !

I'm from the "keep it real" school of thought.

The expense of printing and mailing the coupons, or placing the newspaper ads, etc is "advertsing expense".

The amount you have to reduce the sale amount to meet the advertised price is NOT "advertising expense".

7128's example is good. When sales department sells a $45,000 car for $39,000, they dont show a $45,000 sale and a $6,000 write-off to "advertising". The $39,000 is the sale amount.

In a nutshell, advertsing is advertsing. Loss of gross ** as a result ** of advertising....is not "advertisng"

Just my 2 cents

Cheers
DD