Commission or consignment and how to account for it?

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Marley Cutbush
Marley Cutbush Member Posts: 3
edited November 2018 in Reckon Accounts (Desktop)
Hi Guys, 

I am having trouble with the accounting side of the following situation:

We are boat brokers. At the moment we sell a boat for a customer by the buyer transferring the money to us, we hold it in trust until the sale is complete, we then pass on the total sale amount, less our commission (which is a separate invoice) and less any other outstanding invoices the owner may have with us.
But how the hell do I track this in reckon? I need to know how to track all the flows of money.
For example:

I sell a boat for someone and the boat sells for say $100,000. I need to know how to:

1) Receive $100,000 into my bank account. At the moment I just have a liability account called "Holding in Trust for Boat Sale"
2) I create an invoice for the commission of say $7000.
3) There is already another invoice for say $1000 outstanding to us. 
4) Now I transfer the owner $92,000
But there is still $8000 sitting in the liability account. Can I somehow apply this to invoices ?

And how do I mark an invoice as paid without the money actually coming into my account. Well it did, by more coming in than what went out. 

Confusing I know, but hopefully someone can help?

Thanks!

Comments

  • Fozzie
    Fozzie Member Posts: 16 ✭✭
    edited October 2015
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    Hi Marley

    Not sure if you raised an invoice for the purchaser of the boat?  If you did and coded the sale to your 'Holding in trust' account this method should work either way.

    Receive the funds against the invoice or directly to the holding acc. e.g. $100k

    Raise an invoice to the boat seller for commission inc gst $8K.

    Create a journal.

    Debit 'Holding in Trust' account $8k Credit Acc Receivable $8k. (ar account is the boat seller)

    Pay the boat seller $92k (coded against the Holding acc).

    Receive customer payment and offset the jnl amt against the inv.
    Send the boat seller an invoice with $0 balance.

    At the end of all these transactions:

    $100k in the bank, $92k out of bank.
    $7272.72 commission sales $727.28 gst collected.

    Holding account = $0 Accounts Receivable = $0

    Hope that isn't too complicated and if anyone else out there can confirm or provide a method that may be more simple.
    I'm assuming you know all the GST implications of consignment sales etc.

    Regards
    Tanya

  • [Deleted User]
    [Deleted User] Posts: 0
    edited April 2015
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    Hi Marley, We do real estate sales which are sort of similar given that we charge commission also. We raise the invoice for commission to the debtor account and credit an income (commission) account. When the money is paid - we put it to the debtor and tick the commission invoice (or the ones you want to pay for) which leaves a credit balance in the debtor account. We then create a refund to the client for the difference. Hope this helps. Kathy