Capturing Commission Expenses on Invoices

SamScarboroughSamScarborough Member Posts: 2

Hi,

I am a makeup artist, and am signed to an agency who provide me with work. For this, the agency deduct a commission of 15%. They also deduct tax (PAYE) of 25% which they submit on my behalf. Therefore, the final payment that I receive, is less the commission and the tax.

I am looking to find a solution in how to correctly capture these commission and tax amounts in Wave. I have investigated creating Expense Accounts under the Chart of Accounts, and am looking for some confirmation that this is the right way to go. I have laid out an example invoice below:

  • Total job from agency - R13500.00
  • Agency 15% Commission - R2025.00
  • Tax 25% deducted - R2868.75
  • Amount to be paid to me - R8606.25

In doing a bit of research on the forums, I have come to the following conclusion, and followed these steps:

I create a new invoice for the total job - R13500.00.
Under Chart of Accounts, I have created an Asset "Money in Transit" account, which I have named Incoming Funds. I have receipted the whole invoice here, and distributed the expenses (via the Transactions tab) to the relevant expense categories, listed below.

EXPENSES

  • Tax Paid (pre-existing in Wave)
  • Agency Commission (newly created)
  • Lastly, Transfer to my "Cash and Bank" bank account via a transfer "expense"

This is the final result and seems to be correct. Is this the best way to go about achieving this in the least amount of steps?

Thanks,
Sam

Comments

  • SamdSamd Administrator Posts: 154 admin

    Hey @SamScarborough, I definitely think this is the best way to account for the commission and tax paid while still making it very clear exactly where your money is going in terms of deductions. The way you have this setup will make bookkeeping a lot easier in the future too. I'll let anyone in the community chime in as well if they have anything more efficient, but I think this is a great setup.

  • SamScarboroughSamScarborough Member Posts: 2

    Thank you for your feedback @Samd

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