Sales Revenue Issue: -
I receive advance payments as deposits from a card collection company but they deduct their commission at source and remit the net balance.
The net advance payment is deducted from the sales invoice when it is raised leaving the difference as an unpaid balance.
How can I enter the commissions as an expense payment into the P & L and discharge the balance to clear the sales ledger balance?
Hi Keith,
OK in your case I recommend you create a new asset account called 'Card
Collection Control Account'. Then for each sales invoice where you have an
unpaid balance create two transactions:
1. An invoice payment for the amount of the commission with the Deposit
Into Account field set to 'Card Collection Control Account'. This will
reduce the balance of the invoice to zero, and increase the balance of the
control account
2. A Money Paid Out transaction with the Type set to 'General Payment' and
the Paid From Account set to 'Card Collection Control Account' and
allocated to an appropriate expense account such 'Bank Fees'. The will
reduce the balance of the control account by the commission.
Notice that these transactions have an opposite effect on the control
account - one increases the balance, the other decreases it - so your
control account should always be left with a zero balance.
