Account cash backs to customers

Abiz (Partner) (25 Points)

10 June 2014  

Hello Experts,

We are a small partnership firm with decent sales and very less overheads. We are primarily involved in sales and we have lot of requests from our customers to pass on the benfit to them.

We get a commission of 2% for each sale and customers expect 1% back for buying through us. This is a win-win situation for everyone including the seller.

I'm wondering on what would be the best practice to account this outgoing cash flow to the customer. How would TDS work in this scenario and should we treat the customer as a contractor or anything else.. or are there other ways to handle this scenario.

Your expert advice is highly appreciated. 

Thank you for your valuable time.

Abiz