Capturing Commission Expenses on Invoices
SamScarborough
Member Posts: 4
Hi,
I am a makeup artist, and am signed to an agency who provide me with work. For this, the agency deduct a commission of 15%. They also deduct tax (PAYE) of 25% which they submit on my behalf. Therefore, the final payment that I receive, is less the commission and the tax.
I am looking to find a solution in how to correctly capture these commission and tax amounts in Wave. I have investigated creating Expense Accounts under the Chart of Accounts, and am looking for some confirmation that this is the right way to go. I have laid out an example invoice below:
- Total job from agency - R13500.00
- Agency 15% Commission - R2025.00
- Tax 25% deducted - R2868.75
- Amount to be paid to me - R8606.25
In doing a bit of research on the forums, I have come to the following conclusion, and followed these steps:
I create a new invoice for the total job - R13500.00.
Under Chart of Accounts, I have created an Asset "Money in Transit" account, which I have named Incoming Funds. I have receipted the whole invoice here, and distributed the expenses (via the Transactions tab) to the relevant expense categories, listed below.
EXPENSES
- Tax Paid (pre-existing in Wave)
- Agency Commission (newly created)
- Lastly, Transfer to my "Cash and Bank" bank account via a transfer "expense"
This is the final result and seems to be correct. Is this the best way to go about achieving this in the least amount of steps?
Thanks,
Sam
Comments
Hey @SamScarborough, I definitely think this is the best way to account for the commission and tax paid while still making it very clear exactly where your money is going in terms of deductions. The way you have this setup will make bookkeeping a lot easier in the future too. I'll let anyone in the community chime in as well if they have anything more efficient, but I think this is a great setup.
Thank you for your feedback @Samd
@Samd What if you are only paid the net rate which appears as an automated import?. The split function won't let you add the expense - only if the account it categorised as Processing Fee. My agent commissions are part of COGS so they don't appear as an option in the drop down.
The old batch transfer process which used to deal with this doesn't work any more and there are no comments from admin on the how to guide from users frustrated with the process.
hey @NeilR we're looking to expand this feature but for the time being, I'd recommend recreating the transaction as the gross amount and then entering the expenses as separate expense transactions. I recognize this is frustrating and different from what you're used to, and I'll make sure your feedback from this thread gets seen by our accounting team. Thank you for your patience
What is the point of having automated transactions appearing in my account if I have to delete them? I might as well go back to a pen and paper.
I have been an IT project manager for 10 years. It worked in the previous version, it doesn't work in the new version. "we're looking to expand this feature" is a euphemism for we broke it, or we didn't include it, intentionally or otherwise. Please pass the feedback onto your dev team that breaking/removing features and processes is not only frustrating for users it turns them off the product. The same applies to the 'new improved transfers' feature which is now useless because its automatically creating entries that are not required.
What was once a nice quick product to use has added a series of extra steps and frustrations for a changed UI, which looks very pretty , but has slowed down the workflow.