We are selling services to clients. the client introduced to the office through marketing staff and non-staff. the marketing received commission based on payment received from client.
for Example:
client paid 1000
marketing staff received 20% = 200 and the remaining amount distributed to 3 accounts on % as follow:
partner A 35%
Partner B 35%
Operation 30%
How i will affect this on:
1 marketing staff Account (Suppliers)
2 Accounts (liabilities & Revenues)
You can use Custom Fields for this purpose to track Sales made by certain person.
There is no automatic distribution of percentages to different accounts that you have to do manually using Journal Entry or Payslips whatever suits your case.
Thank you for the quick reply.
I have used the same motioned you mentioned by consider the marketing staff as supplier and post all their translation to “Liabilities control account” but all the transaction (DR or CR) is not reflection on the “Retained earning”
any solution to see the DR or CR transition on my Retained Earning account
Thank you and best regards
Sorry but i did not get this. Can you explain it or maybe with screenshots what you have done.
How are you recording suppliers in Sales Transactions? thats not possible. Can you explain with screenshots?
Following the discussion it is not really clear what you are doing. So from what you wrote I deducted the following:
Questions:
Once you give the answers to above we can better recommend a setup.
Here are screenshots of how I
create sales Invoice
receipt cash
Customer Account (reflet sales invoice + Receipts)
Summary (showing revenue account and Liabilities Accouns)
Distribution of Commission (Journal Entry)
Payment of Commission to marketing (Suppliers)
Supplier Account
the 30% for business operation which is business income
I hope this gives you idea about how I enter my transaction
Please advise what missing in this process.
How can I show the payment I made for the Marketing staff (Supplier) in the Equity section of the Summary (Retained Earning)
I appreciate your effort but you are not answering my questions. You initiated the topic with information such as 1,000 from customer 20% Marketing, etc. Now you gave generic not relevant to your topic information. I will not be able to help until you answer and illustrate the 6 questions including the example data you gave.
Question 1. How does the customer pay, Bank or Cash and do you use a Sales Invoice with expectation to be paid at future date or do you issue directly a Receipt?
Answer 1.) I use a Sales Invoice with Expectation to be paid at Future Date
Question 2. Which account is used as income account to receive the 1,000 in?
Answer 2) Revenue account (Attorney Fees…) as showing in the Receipt as will as summery (the 1,000 was an example but in this illustration show actual amount)
Question 3. 1. How do you pay the 200 to your Marketing employee, do you make a Payment to a bank account and to which Manager expense account is this payment assigned?
Answer 3) Payment in Cash no expense account assigned (before payment I Credit the marketing employee (staff Commision control account) through Journal Entry
Question 4. How do you pay the 35% of 800 = 280 to each Partner (A&B), do you make a Payment to a bank account and to which Manager expense account is this payment assigned?
Answer 4. Same Procedure as mentioned on answer 3
Question 5. You also take 30% of 800 = 240 for Operation. How do you “pay” for this and to which Manager expense account is this assigned
Answer 5. This is considered as business income and paid to different expense account (i.e. Rent, utilities, …) and I posted in manager account (Commission Received) shown in the Journal entry
I hope this answer your questions
Thanks for answering the questions. The absence of expense accounts is unorthodox.
Re 1: You did not itemize the Sales Invoice so I assume that you register the 1,000 as a single line item which will show in the Profit and Loss account as a single 1,000 income item.
Re 2: As you still give different amounts the accounts receivable in the cash receipt should also be 1,000 for that customer and that will clear it in the balance sheet account (no further changes in P&L as already recorded as income at the time of issuing the sales invoice.
Not sure what you are showing under 3 and 4.
Re 5: You should create payments to your suppliers (Partners) using the Payments tab and assign these to an expense account such as Partner Payments that you need to create in P&L.
Re 6: You make a marketing expense so need to create a Payment and assign that to a Marketing account that you create in P&L.
Not sure what 7 is about
Re 8: There is not need to show “operations” as an income account. You already showed the income account for 1,000 all others are expense accounts. The 30% will show as net profit / (loss)
I’m kind of confused so here I retrieve what I mentioned before and explain my scenario in point again we your help to asset me of setting chart of account and other setting required
Note :
I need to show the sales Invoice in full
No action to be taken in regard to Market staff (no transaction need)
Customer pay partial of his invoice in cash
Now I pay Market Staff
How to set Chart of account:
* Create Income account (show the total sales invoice and the partial received amount)
* Create Expenses account (show Market staff payment)
* Create Market Staff account (show % received and payment)
* Do I need to create non-inventory item for service (if yes what Where sold & where Purchase account)
I hope this explained the scenario
Thank you
Unfortunately, this complex pay structure cannot be accomodated by an Accounting software.
The best option is is do this on a spreadsheet and use Purchase Invoices to keep track of your commission payments.