Expense Social Media Advertising as an agency

mangomediallc

Hi! New to bookkeeping here. We now work with social media and google ads and we charge the client for the ad budget once the ad finishes(with some exceptions, they pay me first). So basically they give me budget to run their ads. Am I correct in thinking that this budget that we're paid would count as a service income and when they charge us for the ads we expense it as Advertising & Promotion?

I'm a bit confused cause the description for Advertising and Promotion says it's for our company, but I'm promoting someone else's company. Or did I overthink it?

Barsin

Hey there @mangomediallc

In Wave's current state of invoicing, you can't assign an expense account to your invoice. So what I would recommend doing is creating a separate income account and call it "Advertising and Promotion Vendors" or something like similar, as well as an expense account under your chart of accounts with the same name. When you create the item on the invoice called Advertising, you can assign it to a separate income account by editing the income account. Then once you've receive the funds, create a Journal Transaction and debit your Advertising income account and credit the advertising expense account to move the funds into that expense.

Let me know if this makes sense