I have a client who trades on Amazon. He gets a statement from them when they make a payment to him and it shows deductions for their fees/commissions etc.
When showing the sales in the P & L I am presuming that I show the Sales gross and the amazon fees are cost of Sales? Am I right?
We have a guy in my day job who makes sales and his commission comes off the margin but our accounts are more complex and large scale so I will not be showing it the same as i would at work.
the actual sale is revenue and the amazon fee's are cost of sales.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I have what should be a really easy set of books to do but for some reason I am making hard work of it. He has some purchases made on his debit card through his business bank account, some purchases made from USA in dollars through a credit card and some purchases made through another credit card. I deal with this kind of thing at work but yet because I am on my own at home I can't seem to get my head around it. Mind you we are in the middle of month end at work and my head is mashed from that.
May be it will all come flooding back once my head is clear.
lol, you've been reading that other thread haven't you.
For the debit card just treat them as though from the bank account.
For the credit cards I would set them up as two seperate bank accounts, one in US dollars and one sterling.
I think that we all stall occassionally espechially when we put ourselves under pressure and start seeing problems where there are in fact none.
Did it myself with a client the other day over a client banking more money that they were actually invoicing and got very frustrated that they were not answering the phone when I wanted an answer now, this minute if not before (turned out that they were doing all sort of funny things but it all made sense once I had beaten it out of them).
Sure that you'll be fine and if you hit a brick wall rather than hit your head against it go have a cuppa and then come back to it. You would be surprised how often things are crystal clear after a five minute break.
All the best,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
The client has only been trading sine February/March and are making a loss after cost of Sales. I asked him how much mark up he was putting on his items and he said it depends on what he can get for them on the day etc. His reply when I told him he was making a loss was well I didn't expect to make a profit straight away due to set up costs.
I keep revisiting Sales and cost of sales thinking I must have done something wrong.
I feel like banging my head against a brick wall. Nothing is making sense at all. I have an ear infection so can't hear properly and my head feel like it's full of broken biscuits.
I am sure it will all come together eventually. It has to as the client is paying me tonight!!! Better get a move on.
I think that its a case that your client problably doesn't understand the difference between cost of sales, expenses and assets.
Might be a good idea to do a set of management accounts for them in order to break out the initial costs and show them how actual costs rather than one offs are eating into their non existant profit.
Sure that the client is under the impression that his issue is with the set up costs rather than a poor markup.
My general advice for people selling physical stock rather than a service is to be looking for a minimum 70% markup on cost. How that pans out varies by product line but it makes the client focus on the fact that just because they are selling for more than what they are buying for is not enough and they need to focus on a real figure rather than anything better than cost being ok.
There are a huge number of businesses that fail in the first two years purely because they do not understand revenue vs profit.
The issue that you are having is probably down to the self imposed pressure of knowing that you need to finish the work now in order to get paid. Don't mess yourself up though for the sake of a couple of hours.
You know that you can do this, you do it every day in the day job. Its just the pressure of the time frame thats making the answers elude you.
When hit with this sort of situation myself I generally hit the client with a load of questions that I need clarification on in order to finish the books and that buys you the rest of the night to finish the job (which you sell as just dotting i's and crossing t's even though there may be more to it.
fingers crossed it will all go well for you,
kind regards,
Shaun.
p.s. hope that your ear gets better soon.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
