My business is in Ontario, Canada. It offers a small number of retail items as well as a number of small services.
One of the services is sold singly at the time the service is done, and also as a prepaid package of 5 with a discounted price. The single price is $7, and the 5-pak is sold for $30. (Those prices both include the HST)
Customers pay either cash or with an Interac debit card. All sales are recorded in a cash register, and I get an itemized sales report at the end of each day. My plan, by the way, is to transfer the itemized sales record from the cash register to a Sales Invoice daily so I can keep track of inventory etc.
Customers for the prepaid service are tracked using a punch card system. I plan to continue this practice so do not need Manager to track individual customer balances.
From the Guides and Forum posts I’ve gathered that the sales of the prepaid services need to be broken out of the daily sales record/invoice and placed into a liability account.How?
And in future when a customer uses one of the prepaid services, that liability account needs to be debited (have I got that right?). again, how?
Can anyone help me with the design of this workflow? Existing discussions are confusing. Keep in mind please that I am new to Manager and descriptions of what to do need to be pretty detailed and explicit so I can find my way around accurately.
You only need to use a sales invoice if you have a single customer who will pay you in the future. Otherwise, just Receive Money.
You don’t need to do this if you are tracking things via punch cards. Record the sale of the card. Since the card covers only services, there is no inventory to keep track of as punches are used.
If I use the Recieve money function will this not simply create a single line transactions bit the total of the day’s sales? Inventory tracking is not done. Correct? Remember the days sales will be a mix of goods and services.
And will this properly record the money received for prepaid services to s liability account? How?
And if I’m wrong how will I initiate the receive money transaction?
When filling in the Receive Money screen, there is a dropdown box directly below the Account line to add additional lines to the record. You can add 1, 5, 10, or 20 at a time. Each line can be allocated to a different account, just as on a sales invoice. Some could go against inventory sales, some against service sales accounts, etc.
While you will be able to allocate funds received to a prepaid services account, remember my suggestion that, since you plan to track this via punch cards, you don’t actually need to use a liability account. You can just record the sale of the punch card. For visibility, you could create a Punchcard Sales account.
Thank you for the clarification. I’ll try this. I believe I can then do a journal entry to debit the sales account for prepaid cards purchased and credit the prepaid services liability account which will report the true situation. When services are actually provided in those cards a journal entry to debit the liability account and credit the sales account would be in order. I think. t
That should work. But I wonder why you want to keep track of the prepaid services liability if you are going to track things via punch cards? There was another member a few days ago who wanted to track a very similar liability by customer, so customer credits were the way to go. But that requires creating individual customer accounts. Once you’ve decided to rely on punch cards, why not simply treat sale of a punch card as a completed transaction?
Because it is money taken but not yet earned. That should be recorded as a liability so the situation of the company is clear.
Everything appeared to work fine with respect to inventory items using the Receive Money function in the POS account. However, it seems the Sales Invoice Items I created to deal with the sales of various services are not available in this mode.
So am I forced to do this all through a sales invoice in any event? Or do I split the days sales into two parts - use your Receive Money to handle the inventory items sales and the sale of the prepaid services amount, and raise a sales invoice so I can track the number of service items sold. Seems cumbersome and I wonder if the Sales Invoice Items can be made available under the Receive Money function?
Thanks again for your time to consider these issues. Much appreciated
You are not technically incorrect to view the situation this way under accrual accounting. But there are practical limits to how far one should go. If the prepaid service is for many hours of professional consulting work, I would agree with you. (In fact, that describes some of my business, and I use customer credits to record it.) But if your punchcard was for 5 dog walks you expect to deliver within a few weeks, it hardly seems worthwhile. The customer might lose the card or move away and never collect anyway. And your cost and time to provide the remaining dog walks is minimal, so why complicate things?
I hadn’t noticed this before. I agree that sales invoice items should be available when receiving money. That is one for @lubos to consider. (Remember, I’m just a user like you.)
To me sales invoice items are really just a “shortcut” to quickly create an invoice. Why do you need this functionality under Receive money ? Receive money can still sell inventory items or allocate income to other general ledger accounts. What would be there to gain if you could select sales invoice item under “receive money” screen?
Suppose you make a cash sale of a service to a walk-in customer, rather than a sale of inventory. Sales invoice items would be handy. For example, you are a computer shop and you charge someone to set up email accounts before they walk out with their new iPad. Or you are a veterinarian and someone brings their dog in for a rabies vaccination. Or you run a hair salon and sell a range of services. In all those cases, there might be little purpose to creating a sales invoice, but you perform the same service again and again.
I need to track the sales of inventory items and non-inventory services. I created the services as sales invoice items. I can use these and the inventory items in creating a sales invoice. But as Tut has suggested an invoice ought only be raised when payment will follow with a delay. Receive Money is a better fit with my business where both inventory sold and services provided are paid for at the time they are received. Think of a retail store type of situation with services as well. I could simply do a lump sum for all the services provided I suppose. That might satisfy accounting requirements but it would not allow for producing itemized sales reports that show the number and types of services sold. Unless I’m missing something in my explorations of Manager. And thank you for building this tool. I’m impressed by the way it has made me feel much more in control.
I’m not planning to introduce any reports which would give you totals by sales invoice item.
If you want to track income for non-inventory items, then go to Chart of Accounts and create more income accounts. Then use these income accounts on Receive money screen as required. Then your profit & loss statement will give you a breakdown by these income accounts.
Fair enough. I agree Manager is not great for this use-case right now.