First of all, thanks for a great piece of software and by looking through the forums, fantastic support!
I am not too experienced with accounting but learning fast so bear with me if this sounds a silly question.
What would be the correct way in setting up Manager to run a hair and beauty salon which has self-employed staff which work on % commission basis?
The self employed staff work in the salon and all customer transactions go through the salon payment system . The self employed staff gets paid weekly based on their turnover on a 45-55% basis. The salon accounts should only reflect the 55% it receives from these transactions
Would the best way for this to be when customer pays:
Cash account - receive money
Cash account - spend money and pay self-employed staff 45% of their weekly sales. In this case, what expense account should I choose so as to keep the salon books correct?
You could create income accounts for each staff member in your
Chart of Accounts. So when you record a service provided, you will select income account based on who provided the service.
Once a week you can generate profit & loss statement to see totals of all income accounts (per staff member) so you know how much to pay each staff member.
You don’t need separate expense account for each staff member unless you want to track how much you paid each staff member in total for the period of time (which is probably not really something you are interested in)
The question is - is the salon entitled to show the total sales (100%) or only commission sales (55%).
As the “staff” are being deemed self employed then they are paying a “rent” of 55% to use the facilities.
Therefore the “sales” should go to a BS Liabilities Trust Account in each persons name.
Then on a weekly basis, the trust account is cleared with 45% / 55% split.
When Customer pays : Receive Money - Account = Trust Account of Self Employed
If at the end of the week Self Employed A has 100 balance then Spend Money
Account = Trust Account : 100.00 (which will clear out the balance)
Account = P&L Commission : -55.00 (note the minus sign)
Payment to Self Employed A = 45.00
The salon is entitled to only show commission from chair rental so Brucanna’s solution worked well