Hired Goods - sales

Hi
My small business is Wedding & Events Decor so most of our products are hired. My problem is when i produce a Sales Invoice once we meet an agreement with a client, payment is made over a long period time. Most people book there wedding needs at least 12months or more in advanced. On the report it shows sales for which i haven’t yet received money for. I was hesitant to ask you about this as once before i was told to get an accountant and that i was inexperienced. I am inexperienced, i also haven’t seen an accountant as yet, not out of disrespect to you but just that my business is very slow growing. So been trying to work it out myself. Thank You

I think that under your situation, initially the “Sales Invoices” should be posted to a BS Liability account as in reality you are receiving a series of deposits for a future event and if its cancelled then you will be refunding deposits, not incurring negative sales.

So I suggest that:

  1. under 0 Customise 2 you activate 0 Spec Acct tab

  2. go to Settings - Chart of accounts and on the Balance Sheet create a new account called “Future Events”, select group as Liability and tick the Control Account made up of Special Accounts
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  3. go to the Special Accounts and create separate accounts for each future event
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  4. the Sales Invoice now gets posted to that account
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  5. so now the Accounts Receivable for Twiddle will show a balance which will reduce with each deposit received.

  6. once the event has occurred, you will then do a Journal to transfer the “sale” from the Special Account to the P&L Sales account so your income matches the timing of the event

  7. also, looking at the Future Events account balance will indicate how much work you have booked ahead

2 Likes

Awesome thank you so much.

Also, I used “Twiddle - Apr 2018” for the special account name but you could put the date first 2018/04 then the events would list in the order that they are going to occur.

Once an event has past, put a “z” in front to send it to the bottom.

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Ok great thank you

Well receive money from the customers but don’t relate the receipt to any invoice.

When the time finally comes and the goods are used, issue a sales invoice to the customer. Now Manager will automatically adjust the money to be received from the customers to you from the sales invoice with the advance receipt and show the difference.

Once the hiring hasn’t started all the receipt are unearned revenues from the customers it the invoicing that makes it revenue.

A lot also depends on the contract you have with your customers. Maybe your contract with them makes it a sale even months before the service.

I’m on bed and it dawn at the moment I will get back to you later and show you the technical side.

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O yes, Brucanna has come to your rescue already

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Thank you lol

Kind Regards

Lisa Rhook

Yep … :wink:

Kind Regards

Lisa Rhook

Hi Brucanna first off thanks for your help i have done what you told me with the latest invoice which i have not yet received a deposit for to date. Could you give me a guide on #6 Journal transfer.

Thank You

Hi Abeiku Thanks for your input, our contract is fairly basic. 30% deposit to be paid within 2 months non refundable and full payment must made in full 30 days prior to the event date.

By the way I love your program, all the basic book keeping is a breeze to use. Thank You

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Thank You