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ssraminder
Level 1

Account head for payment to vendors outside Canada

I have a translation company which pays vendors outside Canada on regular basis. While adding their bill, what account type you think would be best?

 

Sorry for asking such a naive question, I am new to Canada to just making sure.

1 Comment 1
LeithG
Level 7

Account head for payment to vendors outside Canada

Hi ssraminder:

 

When recording expenses on your profit and loss statement, it's usually a good idea to create accounts for significant portions of your expenses, but also keep simplicity in mind.

In your example of translation services, are they separately itemized on your invoice from your vendor?  Do they represent a significant amount of cost monthly/annually?

If yes to both of the above, it might be worth creating a separate expense account on your P&L or even creating a 'header account' with sub-accounts of 'Translation' and the other related expenses so you can see the expenses individually as well as together.

If it's not very common (eg you think it would amount to less than 1% of your total expenses for the year), or the supplier doesn't provide an itemized charge for the translation services, I would just record it as a part of the existing/general expense for the service.

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