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Level 1

Accounting for Online Software Subscriptions

My client is  web designer and uses several online subscriptions to create and maintain the marketing and branding products her clients pay for. I've been using the office supplies and software expense category to account for these expenses, however, its my professional opinion that they seem like more of a cost of goods sold but I don't quite want to categorize it as Job Materials & Supplies. I'm thinking I should just create an account similar to Job Materials & Supplies but I would love to hear from someone who has dealt with a similar situation. Thanks for your help!

1 Comment
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Level 15

Accounting for Online Software Subscriptions

COGS relates to the sale of inventory items

 

It is not cost of sales either, he pays that subscription fee whether or not he needs to use them for the client.  And it would be a real mess to try to portion out the payment between jobs done, and the time it was not used.

 

I would use subscription expense, under Other expenses, or office expense if you do not want the amount easily called out in the financials

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