Hello, we are using a third party online store - Bandcamp. They charge 15% on digital and physical product, however they only collect the owed fees when a digital sale goes through.
So for example, a vinyl record (song release 1) sells - the ‘assessed fee’ is deferred/owed, and we receive the full sale amount. If we make a few vinyl sales, a backlog of owed fees grows. Later, a digital sale goes through (song release 2) and Bandcamp take a proportion of the owed fees from that sale. Sometimes we make digital sales but receive no funds because of owed fees. So we essentially have a running tab of owing them fees.
Song release A and song release B are are assigned to different divisions within Manager so we can properly account for all income and expenses with each song release. The way Bandcamp take fees is making this difficult for us.
The challenge is having our bank account reconciled with Manager and also being able to properly account for sales, fees owed and fees paid. What is the best way in Manager to track owed and paid fees related to each sale/song/division?
hi thanks for your response but I’m not really seeing how that is a similar question in relation to the manager software. Im asking about how to account for accrued expenses and related sales when you have owed fees. That other question is about revenue streams and customers. Wont that get very messy if we combine both questions?
@clayc, as was the case with the original poster of the topic where you first mentioned this subject, your question is not about Manager. It is a general accounting question you need to resolve with a competent accountant. Once you have decided what you want to do, come back to the forum (this topic) if you cannot figure out how to do it.
I think the first step is to create a vendor account for Bandcamp.
Then you would have to manually record each sales twice.
The first one is when the sales occur, you create a sales invoice regularly.
The second one is to record the accrued fees of Bandcamp.
You can create the second step either via Genral Journal transaction.
In which the credit line would be Bandcamp and the debit line would be an expense account called for example, fees on sales of records.
Or you can record a purchase invoice with the Bandcamp as its vendor and the inventory line is the mentioned above expense account.
This might help.
thanks @AhmedAtia, nice of you to respond and offer some advice. What i ended up trying was creating a liability account called ‘Bandcamp accrued fees’, and an expense account ‘Bandcamp fees’. When we are owing fees im noting it via a journal entry in the liability account, so we have a running total.
when we make a digital sale but receive no funds because of owed fees, im noting that in the sales receipt as a debit against the liability account. the sales receipt needs to equal zero. I ended up finding this thread that i used for a guide when i searched for accrued expenses - Overtime (Salary) & Accrued Expenses
i have to admit im finding this forum challenging to work out what is considered an accounting question and what is a Manager question. That link is a good example.
@clayc Your solution is very good.
If you are facing any issue, keep posting it to the forum.
Sometimes, the main members of the forum take caution in giving advice concerning accounting issues due to the taxation laws of each country and how it might affect the user.
Still, I have been using the forum and it is very useful and even reading new topics help sometimes with new ideas with my work.