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How to handle cell phone activation rebates in System Five

Setup requirements:

Add a New Sub Category for activations as a Non-Inventory Type, for example: 240 ACTIVATIONS
Add a New Part to Category 240 ACTIVATIONS, for example: CELL-AC no cost or selling price

Step 1

Invoice customer

Sell the actual phone unit at the full price
Add the Activation (CELL-ACC) after the phone with a negative Qty and Price of the expected Activation rebate
With the Total now at the discounted Net Price to the customer, complete the sale

FULL LIST PRICE (COST WAS $625 PRICE OF PHONE WITH NO ACTIVATION PLAN) INC=$799.00 COST=$625.00 Profit=$174.00

PHONE ACTIVATION -1 QTY @ PRICE of rebate = -$499.00

VALUE OF SALE TO CUSTOMER WILL BE = $300

Net Profit = -$325.00

Step 2

Invoice Provider as A/R sale which is tracked until paid. Enter the customer invoice number in the Reference Number field.

Add the Activation (CELL-ACC) after the phone with a positive Qty and Price of the expected Activation rebate

PHONE ACTIVATION QTY +1 @ PRICE of rebate 499.00

Total Net Profit = 174.00

Note:

The net profit of both sales gives accurate commission reporting based on profit. The A/R invoice tracks the sale and activation rebate until paid by provider. When the provider pays rebate, apply the payment to the A/R invoice (no journal entry required)