Tracking items sold on behalf of clients

OldMacITGuy

Hi all, new to Wave, moving from an older, simpler system.

I understand billing for services, that’s straightforward enough. My problem in short: clients provide used items (eg. a laptop), the current value of which is effectively unknown. I sell the item for them, and charge them a percentage commission.

Here’s what I’ve worked out so far:

1. Client provides item.
   I was unsure whether it makes sense or is worth it to record this as inventory, but the way I’m seeing it now, these items aren’t actually business assets. So probably better to track these on a spreadsheet, and just record the sales as below.

2. Item is sold (cash). Eg. Laptop for $300.
   I recorded this as a Deposit transaction to Cash on Hand. Conceptually, I now owe the client $300. So what I’m thinking is that I should have a Liability account “Client Items Sold” under Customer Credits that this is applied to?

3. I invoice the client.
   Typically I’ll have some service costs that offset the value of the items sold, but will ignore that here.
   Item 1: “Sale of Client Items” Amount: -1 Price: $300 = ($300)
   So an invoice won’t let me credit a liability account? So now I’m thinking I should use an Income account instead here and above, so it balances to 0 when I issue the invoice. So I’ll assign this to an income account “Sale of Client Items” to match the product name.
   Item 2: “Commission” Amount: -0.33 Price: $300 = $100
   Total: ($200)

Resulting balances:
Asset: Accounts Receivable: +$200 (credit)
Asset: Cash on Hand: $300
Income: Commission: $100
Income: “Sale of Client Assets”: $0 (balances)

So now I just have to send my client $200 to pay off this (negative) invoice showing the amounts, and everything will balance.

So that appears to work. I’ve read the comments on the page https://support.waveapps.com/hc/en-us/articles/360000278846-Accounting-for-overpayments and I agree with many of the posters:

1. There should be a way to assign costs or credits to existing liability accounts, rather than only using income accounts on an invoice
2. Wave should track both amounts owing from and to customers. Absurd they actually suggest keeping a separate spreadsheet of overpayments.

Would appreciate any input as to how I’m doing this all makes sense.

AlexL

Hey @OldMacITGuy , we definitely applaud any user who's able to figure out a workaround in the system for what they're trying to accomplish. Good job on this one .

Based on your workflow noted above, I think this actually does make sense for what you're trying to accomplish. In regards to your feature ideas, I'm more than happy to pass these along to our Product team and use your current workflow as reinforcement as to why these would be good additions to the software.

Thanks again for sharing this with us!