I have a client who offers cashback through debit cards when a product is purchased (over a certain amount)
I record the cashback seperately but how do I net off on the PNL as I don't really want to record it as taxable income as in theory, the customer has had the cash back so no income has been received. The card receipts come in the bank for the purchases, this includes the cashback paid back to the customer, I have a balance of each cashback paid but I'm not sure how to net off on the PNL so this isn't included in the revenue?
Does anyone have any ideas?
thanks,
-- Edited by Moeroe on Friday 17th of June 2016 08:19:00 PM
Hi Amanda
Welcome to the forum. We always ask newbies to do a little intro about themselves, bookkeeper or Accountant, where based, which prof body you are with, level of study or QE, how long you've been in this crazy business, that sort of thing. Just a few lines, helps everyone to get to know you a little and also to help pitch answers.
For this one as well, it's probably worth advising with software you are using, whether it's desktop or cloudy (and for some, perhaps even the version number etc) then advice can be more specific.
Also, we ask peeps to add their first name to their signature bar so that it pops up on all posts, just saves us keeping looking it up. Go to edit profile, easy peasy and only takes a sec.
Thanks and I look forward to hearing more and then hopefully helping out.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I'm Amanda, I am a member in practice with AAT and also part qualified with CIMA (still studying), I am based just outside of Peterborough and I have been in this crazy business for near on 10 years. I have a wide range of knowledge across accounting and various software programme knowledge including SAGE online 50, 500 and 1000, VT Accounts, and NAV. Currently I am using Sage 50 and VT Accounts.
As explained in my previous mail, i'm a little unsure regarding cash back transactions and netting them off in the PNL. Please see my post above.
If anyone can help me, it would be greatly appreciated.
Kind Regards,
Amanda
-- Edited by Moeroe on Tuesday 28th of June 2016 11:47:08 AM
Hi Amanda
Good to have a MAAT MIP on board and one who uses sage and VT.
I forgot to ask another questions about whether you allocate existing monies received to a cash or cash register bank account straight to a nominal code or indeed to customers invoices. I will assume the former for now.
For this one I would suggest you have a separate nominal for your cash back element in your P&L - you could allocate in the 49xx region and style it as 'cash back' or something similar.
When you process your monies in - allocate via bank receipt to 'cash bank' - sales element to usual sales nominal code, with correct tax code, then cash back element to 49xx T9. Then immediate 'bank payment' to same 49xx T9, which means the cashback account will always be nil. Plus the till should be correct. Then do your usual transfer for the full amount of cards between the cash account and the Bank.
Hope Im making sense!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thank you and yes that makes perfect sense, the only problem I foresee is the bank account will be incorrect. At the moment, the client provides me with daily summary sheets which indicate all the sales and cashback seperately, I input this into Sage as a sales invoice so I know what income to expect through the bank account. I then receipt this into the bank once it has cleared (along with all the card transactions which fall in over the next couple of days after)
I receipt the cashback element straight to a nominal through the current account, if I was to do a sales payment, would this credit the bank leaving me with an indifference in the bank account?
I am happy to change it, I'm not exactly sure of the best way though.
Hi Amanda
Sorry - can i come back to you later! Have migraine and can hardly see the screen and have my assistant on about a sage issue. I wont forget!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi Amanda
oh thank you - fuzzy head its not shifting so I might be being a numpty on this one.......
So now you get daily summary and you put the TOTAL on sage as a sales invoice? With this split between actual sales and another nominal for cashback?
Then this is
Paid off with 'Bank receipt' say 2 days later from receipt of your streamline/pdq or whatever they are called entries....... in full.
To check - you dont have anything touching your cash account at this stage?
So would his cashholding in sage not be out by the amount of the cashbacks? So dr sales / cr cash?
Or am I missing something.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
