Purchase discounts are been handled as liabilities

hi folks,

ERPNext is handling the purchase discounts as liabilities. is it the way ERPNext works?

here is my scenario

I did a Purchase Order

the total of this purchase order is $1080.00, at this moment there is no discount, but the supplier will give me a discount of 2% if I pay my invoice before 10 days.

when I generate my purchase invoice before the 10 days limit, I apply the 2% discount in this case $21.60

after these transactions if I check the financial statement balance sheet shows the $21.60 as a liability in account (2210 - Stock Received But Not Billed), when it should be a cost of goods sold (income).

does anybody know how it works? can the purchase discounts go to a cost of goods sold (income) account?

thanks for any help

@alexsilva your procedure is what’s wrong!

Because you have one invoice with goods at 1080, so you can’t record it as 1058,40, unless it’s the same value as the supplier invoice.

The discount you are reporting, is handled under Payment Entry, into the section “Deductions”, because the supplier gave you one discount over payment, not over invoice!

thank you very much Max for your help on pointing out where I was wrong; all is good now!!!