The reason it matters that it is not revenue is that in this jurisdiction there is a subsidy based on reduction in revenue during COVID-19. The neighbour’s ability to sell was severely hampered so we helped out. Before the pandemic we were not selling anything for him, nor did we have an online store. So it doesn’t make sense to inflate revenue. For income tax purposes the difference is only what goes on what line of the tax forms and the end result is the same.
Regarding your side comment with the discount for early payment - yes we have at least two such vendors. It would be nice if bills permitted discounts like invoices do, since there may be five line items with three accounts and I generally don’t but should allocate the discount proportionately. Sent from my iPhone > On Jan 15, 2021, at 1:15 PM, Adrien Monteleone > <[email protected]> wrote: > > On 1/15/21 7:25 AM, R. Victor Klassen wrote: >> The mechanism looks like this: customer orders from our online store >> (typically) some items of ours and some of the neighbour’s. Branding is >> clear on the store. Twice a week we deliver orders. On that day or the one >> before, we inform the neighbour what they need to supply (we have no >> inventory of theirs - they are responsible for informing us how much we can >> sell) and they bring it over. We pay in cash the amount the customer will >> pay us, less a percentage. The customer has already paid us through the >> online store. >> Where it starts to look like bills and invoices is that the online ordering >> system provides us with what can be (fairly) easily converted (perl script) >> into an importable invoice. But the online system, being 3rd party, has no >> idea that we have a mix of sales out of our inventory and commission sales, >> so the invoice contains both. > > Okay, so this is more formal than I was thinking. Certainly, if you can make > this work by importing from a 3rd-party app, that is the best route. > >> This looks somewhat cleaner than having an expense amount that later gets >> re-characterized. >> Cleaner yet would be putting an income entry in a bill, but that’s not >> permitted. > > > Probably because that would then be a charge to the neighbor, which is > usually done for a 'customer' rather than a vendor. (the devs seem to take > the approach that it is extremely rare for customers to also be vendors > and/or employees, or all three. From personal mom & pop small biz experience, > I beg to differ, but I understand trying to accommodate such cases might be a > bit messy for the code.) > > You could possibly initially treat the commission as a discount from the > neighbor. I don't know if you can use the discount feature and have it hit a > proper income account, or if it needs a special contra-expense account that > you later balance out with income. Otherwise, you could maybe enter it as a > separate line-item. > > Maybe ask a CPA, as it might work as a discount the whole way around and you > don't need to involve income accounts at all for it. (if you are tracking > COGS, it would reduce your cost, thus increasing income, as distinct from > revenue) This would be similar to 2/10Net30 terms (does anyone offer that > anymore?) where if you pay within 10 days, you can deduct 2% off the invoice, > otherwise you have to pay within 30 days to avoid late fees or interest. Such > terms are vendor discounts applied against inventory, and thus against COGS. > (and very likely tracked in their own account a la "Vendor Discounts" so you > can tell if you are taking advantage of them. Some business even track > available vs. utilized discounts for that reason.) > > Since you are paying the neighbor for the merchandise and taking possession > of it, perhaps you should be booking it to inventory anyway. (again, a local > CPA can better answer that for your exact situation) > > This kind of sounds like a 3rd party shipping and payment factor situation > (common in the furniture industry for example) where sometimes, the trucking > company takes possession of the merchandise legally, buying it (the invoice > less a percentage for the convenience) from the shipper, and then collects > the full amount from the retailer. This used to be common with owner/operator > single-rig truckers, but can still be found with small fleet operations. > > Other than the manufacturer/wholesaler shipping on their own trucks, the > other scenario is the retailer takes legal possession at the shipping point > (known as "FOB shipping") and pays the shipper and trucking company > separately. The trucking company is merely custodian for the retailer's > product. > > I know all of that gets off the main topic, but it may shed some light on how > you approach this. > > Regards, > Adrien > > _______________________________________________ > gnucash-user mailing list > [email protected] > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. 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