I am having trouble understanding how the entries are to be done.
I have issued an invoice to a customer for samples at USD 100 inclusive of shipping charges and FedEx has issued an invoice for USD 10 for the shipping. How do I do the entry so that I am able to see the shipping charges I have paid under that invoice as then the profit should show USD 90 less cost of the product.
Pleas advise on the same.
Do you include shipping charges explicitly on your sales invoice?
Are you selling goods from inventory?
Samples are normally free - are you just giving the customer a discount?
There are already several posts about shipping charges on the forum, which you can find by using the search function in the upper right corner.
@scentiche, it is not possible to calculate profit on a single sales invoice, as profit includes many more factors than sale price, cost of goods, and shipping charges. Nor is there a way to link a purchase invoice from FedEx to a sales invoice to your customer. But the contribution to net profit will be taken care of automatically, as the program subtracts expenses from income.
The closest you can come to what you want would be to somehow know the shipping charge in advance (through a rate agreement, for example) and include it on the sales invoice. But, if you are not explicitly charging the customer for the shipping cost on their order, shipping is just another cost of doing business. And even if you are charging the customer explicitly, that’s just a way of charging more for the product. The payment to FedEx is still separate from an accounting perspective.
You could treat it as a billable expense, surely?
Yes, you could. But that seems like unnecessary work if you already know the shipping costs. But @scentiche never answered the questions posed.