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Reseller Hosting Business Chart of Accounts
mauwiks
Member Posts: 4
Hi Guys,
Just want enlightenment about what chart of account and the right category to input my VPS hosting subscription to provide a reseller hosting product for my clients and as well as the Domains I have purchased to resell.
Thanks further for your time.
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Hey @mauwiks -- Forgive me since I'm not an accountant and can't really give you too much accounting advice in these situations.. but I think perhaps an operating cost might be what you are wanting to categorize these types of transactions for. Could definitely use a +1 though from some of our accounting/active community members @Mikeg @MerlinAccounts_UK @Jacqui_EN_2018.
@mauwiks ,
I'd classify the VPS Hosting as dues and subscriptions and the domains as Purchases. You may need to add those accounts if they are not in your chart of accounts under Expenses.
Thank you very much!
Thanks for the tip!!!!!
Hi Mauwiks,
It would seem that you are purchasing these items for the purpose of reselling them. If that is the case, they should be classified as Cost of Goods Sold instead of expenses. (This will allow you to take the costs directly off the sales income and lower your income tax obligation.) An expense is something you purchase strictly for use in your business (like paper, insurance, monthly utility bills for your office). Expenses are not always deductible from income.
I would suggest making a separate Cost of Goods Sold account for each item to make the reporting of income easier for yourself. If you need help with it, please either call or email me at jpeebles@enumbersllc.com and I will gladly assist you.
Hope this clarifies the difference for you.
Jacqui
475-882-2243
Hi Jacqui,
I was having the same problem, showing the resalable items as "Expenses" and it just wasn't working. Thank you very much for the advice, by having a Cost of Goods Sold account, my accounting is simpler now. Wolfman