DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Sales Invoice Items: What account to assign them to?


#1

I have 2 types of invoice items to sort out here.

One is a physical item (i.e., a music book) and the other is actual consulting time (i.e., a 30 minute music lesson)

I’ve noticed that they automatically get allocated to “suspense”. What should I be changing them to so they get out of the “suspense” account?


#2

You shouldn’t use inventory for time. Use Billable Time module instead. This will be especially suitable for music lessons, since you have a finite number of students (customers) who are known in advance. It will lend itself to different billing arrangements, as well, such as some students who pay every lesson, some who pay monthly, etc.

Another way to handle this is to create sales invoice items. For example, a 30-minute lesson could be one item at a price of 50. A 60-minute lesson could be automatically discounted by setting it up at a price of 90.

Read about these items in the Guides.

Items go to Suspense only when you have made incorrect entries, such as when debits do not equal credits or when a specific customer subaccount has not been designated after a control account has been selected.

Please describe exactly how you entered one of these accounts so we can help you troubleshoot.


#3

I went to settings>create invoice item>and created item i.e., “$10 trial lesson” but didn’t select an “account” for it to be allocated to. Should I have made a specific Income account in “chart of accounts”?


#4

You don’t necessarily need a separate account. That will depend on how you want to categorize income for your own (or your accountant’s) convenience. But yes, you do need to assign it to some income account. Otherwise, you will need to assign every transaction to an account when you create invoices or receive money. It saves time and reduces mistakes to choose the account when you create the sales invoice item.

In my own case, I have both hourly rates and certain fixed price services. I account for hourly services through Billable Time and have renamed the Fees from billable time account to Service sales (hourly). I assign fixed price jobs by using sales invoice items, and allocate those to an account named Service sales (fixed rate). Other income categories go to different accounts.


#5

@emma_woodorth, I never addressed your question about the music books. If you regularly stock a lot of them, creating them as inventory will help you track your stock and allow you to invoice for them at a markup, etc. But I wonder if that would really be necessary.

If you obtain a book for a known student and invoice them for the books immediately, you could use Disbursements. That tab was designed for pass-through expenses, although it also allows you to mark up or discount the expense.

Another possibility is to allocate your music purchase costs to an expense account (you could even name it Students’ Music, for example). When you sell the book to the student, you would Receive Money and allocate the transaction to that same account. Manager will automatically enter the amount as a negative because you are receiving money in what is normally an expense account (where the normal transaction would be to spend money). This will work conveniently if you do this only occasionally.

Still another way is to allocate the purchase costs to Students’ Music, but receive payments to an income account (which could be named something like Students’ Music Payments).

The final choice really depends on how many such transactions you will be making and what information you want to extract from your records.