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HRBOUTIQUE
Level 1

Software Subscription Fee - Expense account

I have an online clothing boutique.  One of the systems/ websites I use charges a monthly flat subscription fee along with a % of sales as a total cost to use all services. Do I need to classify the monthly flat fee separately from the % of sales? Or would this all go in to the same expense account?  I currently have the flat amount added as Other Expenses - Subscription Costs.   Thanks so much!

1 Comment 1
john-pero
Community Champion

Software Subscription Fee - Expense account

You are already on the right track, segregating the website cost which is always an expense from the % on sales which is a Cost of Goods - precisely a cost of each transaction it is imposed on and affecting the profitability of that particular sale.  There is nothing wrong which not attaching the sale % to each sale but instead reporting the total as a page 2 of Schedule C adjustment to reach COGS 

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