October 26, 2026 · Mitt Patel · 5 min read
You install a heat pump in March, the customer signs over a $500 manufacturer rebate to you as part of the deal, and the check finally shows up in July. By then you've forgotten which job it belongs to, and it gets dropped into income like it was a tip from nowhere.
Why this happens
Rebate programs run on their own clock. The utility or manufacturer has to review the paperwork, confirm the install, and cut a check. That can take eight to sixteen weeks, sometimes longer. Meanwhile your business has moved on to a dozen other jobs.
The disconnect is timing. You give the customer a discount up front, assuming you'll collect the rebate later. But the invoice for the job and the rebate payment land in different months, often different quarters. If you don't tag the rebate the day you invoice the job, there's nothing linking the check that arrives in July back to the install in March.
This costs you in a few ways. First, forgotten rebates can become money you earned and never collected, when nobody follows up on a check that didn't show. Second, when a rebate check does arrive and gets booked as plain income, your books show a revenue spike that has nothing to do with that month's work. That makes it harder to tell whether your actual install and service business is growing or shrinking. Third, if you're ever looking at job profitability, a job that shows a $500 discount with no offsetting rebate income looks like you ate the cost. You didn't. You just haven't recorded the other half yet.
A worked example
Say you install a system for $8,000. The manufacturer offers a $500 rebate, which the customer agrees to sign over to you in exchange for a $500 discount on the job. You invoice the customer for $7,500.
At the time you invoice, you also record a $500 receivable: money the manufacturer owes you, separate from the $7,500 the customer owes you. Your books now show the full $8,000 job, broken into $7,500 collected from the customer and $500 owed by the manufacturer.
Four months later, the rebate check for $500 arrives. You deposit it and clear the $500 receivable. Nothing hits your income statement that month, because you already counted the $500 as part of the job's value back in March. The job's true value, $8,000, is visible the whole time, even during the four months you were waiting on the check.
Without this step, March shows $7,500 in revenue for a job that was really worth $8,000, and July shows an unexplained $500 deposit that looks like income from nowhere.
How to set it up
- Create a separate receivable account in QuickBooks Online for rebates, something like "Rebates receivable." Keep it apart from your regular accounts receivable for customer payments, since the payer is a utility or manufacturer, not the customer.
- At the time you invoice the job, record the rebate amount as a debit to rebates receivable and a credit to the discount applied on the invoice, so the invoice reflects the discount you gave.
- Note the program and job on the entry. Rebate programs vary by utility, by equipment type, and sometimes by season. A memo with the customer name, program name, and expected rebate amount saves you from guessing later.
- When the check arrives, deposit it and apply it against the rebates receivable balance for that job, not as new income.
- Review the receivable balance monthly. Anything sitting there longer than the program's typical payout window is worth a phone call to the utility or manufacturer to check on status.
Mistakes that undo it
- Booking the rebate as income when the check arrives, instead of clearing a receivable you already recorded. This inflates income in the month the check lands and understates it in the month you did the work.
- Never recording the receivable at all, so there's no reminder to follow up, and slow-paying programs get forgotten entirely.
- Lumping all rebates into one generic account with no job or program detail, so when a check arrives you can't tell which job it settles.
- Writing off old rebate receivables without checking first. Some programs genuinely take six months or more. Confirm the rebate was denied or expired before removing it from your books.
Monthly checklist
- Pull up the rebates receivable account and list every open balance.
- Match any rebate checks received that month against the open list and clear them.
- Flag any receivable older than the program's usual payout window for follow-up.
- Confirm new jobs with assigned rebates were invoiced with the receivable recorded correctly.
- Note any rebate programs that changed terms or amounts, since these shift year to year.
Common questions
What if the customer keeps the rebate instead of signing it over?
Then there's nothing for you to track. You invoice the full job amount and the customer applies for the rebate on their own. This system only applies when the customer formally assigns the rebate to you, usually in exchange for an upfront discount.
What if the rebate check comes in for a different amount than expected?
Adjust the receivable to match what actually arrived. Programs sometimes pay less than quoted if paperwork is incomplete or equipment specs changed. Record the difference and note why, so you're not left wondering later.
Should I record the rebate as income once I'm confident it's coming, even before the check arrives?
No. Keep it as a receivable until the check actually arrives. Rebate programs can deny claims, run out of funding, or delay indefinitely. Treating a promised rebate as income before it's collected can overstate your position if it falls through.
How long should I wait before following up on a slow rebate?
That depends on the specific program. Some utilities post expected processing times on their rebate paperwork. If you don't have a stated window, a reasonable check-in point is once you're past double the time it's taken for similar rebates to arrive in the past.
North Hudson Bookkeeping sets up rebate tracking like this for heating and cooling businesses across North Jersey, and keeps it current month to month so nothing gets lost between the invoice and the check. The first call is free.
