Setting up books for my consulting service

gjergji

Hi -- I am learning Wave through a Udemy class, which is so-so, and don't have much experience in bookkeeping. Here is what issues I'm running into and I'm hoping you have answers;

1) My Income is being duplicated into 2 separate income accounts I created (Sales and Consulting Income). So income statement shows double my actual income. But I can't delete one of the accounts. How do I make sure my income is displayed correctly?
2) I higer sub-contractors to do some of the consulting work for me. Because this is a service I set up a COGS account called Cost of Service Sold, and group my subs invoices into that category. Does that sound correct?
3) My clients give me Advertising funds (say $2000/month) so that I can use those funds to advertise their business in Google. Google automatically takes $500 of my bank account every week. How do I allocate that $2000 that is passthrough from my client to Google? I currently put it in Advertising & Promotion expense account, but that doesn't seem right to me because I'm not advertising my business. This is just money I get from Person A to give to Person B. Any help with correctly allocating this?

Thank you in advance.

HelpIfICan

1) To stop the duplication, you have to assign your different Income accounts to specific items in Sales>Products and Services on the menu on the left. Otherwise, the system uses the default Sales account. But you can't go back and reassign your income accounts to a particular invoice. You'd have to delete the invoices and reenter them after you assigned the Products and Services to the specific Income accounts using the Sales menu. Otherwise, you can technically change the past invoices to the right Income account but those changes will not be on the Reports.

2) If you don't plan to have any actual COGS (no products sold) then it sounds okay but since all the expenses are payroll, then why not make it a Payroll Expense account?

3) That $2000 should be in an account called Unearned Revenue. When you get that $2000, you debit cash and credit Unearned Revenue. Every time you get the $500, you debit Unearned Revenue and credit Service Revenue, assuming you're using accrual-based accounting. If you're using cash-based, then you'll record the $2000 as Service Revenue, as a credit, and you'll debit cash. If you're cash-based, you'll credit cash when Google takes the $500, and you'll debit whatever expense account you've got those expenses under. I might call it Customer Advertising Expense.