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recording sales commission due back

Hi All,

 

we are selling financial services that we receive a bulk commission for as administrators. I record it as sales receipts. Then we pay commission to brokers which I record using "cheques" in QB. Now, one broker was overpaid and needs to return the funds. If this was already in the bank account I would just deposit it to COGS to reduce the commission paid but how to record that the commission is due back to us? One QB user advised to create an invoice but this will create extra sales which is not true. Any other idea?

Best answer 04-10-2019 05:52 AM

Accepted Solutions
QuickBooks Team

Re: recording sales commission due back


Hello,

 

Yes, that would be fine. You would then also have record of when you registered that the commission was due back to you through the voided invoice.

 

Thanks,

 

Talia

7 REPLIES 7
Established Community Backer ***

Re: recording sales commission due back

Who you pay should be set up as a supplier

 

Then if you enter a bill for the supplier, paying more than what is due to the supplier will record a supplier credit that can be applied to the next bill.

 

I do not know UK accounting regulations, but in the states, your situation would not use COGS, it would use a cogs type account titled COS< Cost of Sales.  COGS, here, when you file taxes only deals with inventory sold.  I would suggest you check with a tax ccountant

QuickBooks Team

Re: recording sales commission due back

Hi Agnes_1

 

If you are receiving the commission back into your bank account you could create a bank deposit selecting your commission account in the account column....or you could create a Journal Entry, credit your commission account and debit your bank account.

Community Contributor *

Re: recording sales commission due back

Hi John, I know how to record it when it is returned, the way you described. But if I am still waiting for the funds to be returned, now to record it in QB?

Community Contributor *

Re: recording sales commission due back

Hi Rustler,

 

thank you for your suggestion. Let me give you a bit of background.

We are selling a financial product, we are administrators of it so what happens we received a commission from the product provider and we pay some of this commission due to brokers for distributing of this product. So when we received the commission I record it as Sales Receipt ( I have 3 products and created 3 accounts under income). Then when we pay to brokers I use checks in QB to record these payments providing name of each client and posting the payment to COGS account as this is actually cost of goods sold. And now I have a situation when one case from one broker was cancelled but the commission was already paid to that broker. Now he needs to refund it to us. If he already did that I would just enter a deposit to reduce the COGS but the thing is that we are still waiting for it. Is there any way of showing it in QB?

QuickBooks Team

Re: recording sales commission due back

Hello Agnes_I,

 

The only way we would advise to record it would be as an invoice, as you mentioned, however if you are on Accrual accounting this will increase your sales - there is no official way to record this without increasing your sales.

 

Thanks,

 

Talia

Community Contributor *

Re: recording sales commission due back

Talia, so actually I could only create the invoice to show the funds due back and when the funds arrive I could just void the invoice/delete and enter the funds as deposit? This should be fine, shouldn't it?

QuickBooks Team

Re: recording sales commission due back


Hello,

 

Yes, that would be fine. You would then also have record of when you registered that the commission was due back to you through the voided invoice.

 

Thanks,

 

Talia