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We have a retail business in which we have a few artists/artisans that have their items for sale in our store. We will collect a small commission on the item when it sells. How is the best way to set up accounts for sales of these items and the subsequent payments to the artists? It does not seem that the sale of the item should be counted towards my gross sales/income account, just the commission? Would appreciate any insight on the way to set this up. Thank you very much!
Hey there, @BarnDoors_Bruce.
I've got some information with regards to tracking your sales and commissions in QuickBooks.
To track your artist's actual sale, you can create a liability account for it and link it to the service item. This way, it won't be added as your gross income. Here's how:
After creating the account, follow these steps to associate it with your service item.
Then, create another service item to track your commission. Just use any income account for it so you can track your sales revenue.
After setting up, you can now create an invoice or sales receipt to record the transaction. Then, create a check once you pay your artist. Just make sure to select the liability account that you've set up. Then, enter the same amount of sales to zero out the liability balance.
Additionally, you can run the Income by Customer Summary report to show your gross profit from each customer. Simply go to Reports and select Company & Financial. Then, click the Income by Customer Summary report.
Keep me posted if you need anything else or have other questions about managing sales transactions in QuickBooks. I'll be here to help. Wishing you continued success in your business.
Thanks much that makes sense! Will set it up that way and give it a try.
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