Hi,
I hope I can clearly communicate this…
We run a Sawmilling business, and went offsite to mill a customers timber, we sold some of his timber on his behalf, and invoiced that customer ourselves, now we’re invoicing the first customer and I want to somehow link the invoices together. Is there a way I can do this?
I hope this makes sense. Thank you.
You need to explain why you want to link them. The invoices are to different customers. Financially, they are unrelated based on your description.
They seem unrelated, except that the wood sold still belongs to the first customer. It was/is never ours. The 2nd customer was ours. And we facilitated the sale on behalf of the first customer, and on his invoice we charged him for all the milling that we did, including the timber sold, and then included a credit for what was sold. We received the total amount of $ (adding the invoices together), but we never held the timber. I wanted to somehow link that two invoices, to show the relationship between the two. Is that any clearer?
The invoices remain financially separate. You never acquired the lumber. You sold a consignment to the second customer for the first customer and earned a share of the sale for your effort.
So you should enter a sales invoice for the milling services for the first customer. You can either enter a negative line item on that invoice for the consignment sale to the second customer or create a credit note for the amount. The result will be the same; the first customer will owe less because you already collected for the consigned lumber. The share of the consignment sale credited to the first customer depends on your contract. (Perhaps they will owe you nothing or even receive money from you.)
The second customer should receive a separate, second sales invoice for the lumber they purchased through you.
Any relationship between the sales invoices should be indicated only in a note.
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Thank you Tut. Very clear and helpful.