if the stylists are paying her rent for the chair and she is also taking a percentage of their sales. then the rent would be other income so you could set up a new code for that and call it chair rent received . I think the percentage could also be other income . or just add it to the sales .
As they don't take the money themselves when a client pays - it goes straight into her till or bank. So she reimburses them the money less a percentage that she takes.
But my question is - is the cost of the self-employed stylists a cost of sale?
Thanks Rachel
-- Edited by rachel_mclean on Tuesday 8th of July 2014 09:32:53 PM
I would separate the receipts from the self employed stylists out, as they should not be part of your clients turnover.
The only part of the transactions you client gets, is an income from the chair rental.
The way I see this scenario, is that the stylist, is a creditor, and a debtor of your client being owed the full value of the receipt but also owing some rent, which makes it slightly complicated
It gets a bit messy but using VT I would probably set up a supplier account (Stylist? but you may want to have one for each stylist), and another income account (Chair rental?)
Instead of posting the relevant receipts to an income account, post it to the supplier account. So I would DR Bank a/c (Till?, or whichever account you currently post the receipts to) and CR Supplier > Stylists a/c (not to sales). In VT go to the supplier account and using the black PAY button at the bottom pay in to the appropriate bank(Till?) a/c
When the money is paid to the stylist, I would journal DR Supplier > Stylist a/c the full amount and CR Income>Chair rental the value of the cut, and CR Bank (Till?) the balance. This will clear the debt to the stylist, and leave the income in the bank from the rental income.
It isn't as bad as it sounds, and with VT you could set up a custom transaction to make the receipt side of it easier. There will be other ways of doing it but I cannot see anything simpler.
If your client is VAT registered, it gets even more complex, as the chair rental will be subject to VAT as well
HTH
Bill
Edited to add the comment about VAT
-- Edited by Wella on Wednesday 9th of July 2014 12:32:34 PM
What I understood Rachel to be saying, is that her client (the salon owner?) is only accepting the payment on behalf of the stylists. The stylist is making a direct supply to the customer.
She is not paying them a commission, she is paying them the full amount but retaining her chair rental fee.
I would agree with you if the salon owner was making the charge to the customer but in this instance I don't think they are subcontractors.
