Deposit and Finders Fee

WhataGreatDayWhataGreatDay Member Posts: 2

I procure products on behalf of my customers as follows:
1. I identify the product that the customer wants to purchase.
2. I put a deposit of $2,000 to hold the product.
3. The customer buys the product from the seller. I don't get any money in this transaction.
4. I send an invoice to the customer for $7,000.
5. The customer pays me $7,000. Out of the $7,000, $2,000 is my deposit, $5,000 is my commission.

Questions:
1. When I send the invoice and receive payment, all $7,000 looks like income which is not the case.
2. How do keep track of how much money I have in deposits?
3. How do I allocate the correct distribution of the $7,000 into the proper places.

Thank you.

Comments

  • BarsinBarsin Administrator Posts: 1,783 admin

    Hey there @WhataGreatDay

    Wave does not allow you to assign parts of an invoice to an expense account or loan account.
    I would recommend create two income accounts:

    1. In your Chart of Accounts (CoA) create an income account called "deposit income"
    2. Create an expense account for expected payments from customers. Call it deposit expense account
    3. Create an item on your invoice for the $2000 deposit, and the rest of the $5000 for your regular income account (commission).
    4. Use a journal transaction to debit the "deposit income" created in step 1, and credit the "deposit expense" account.

    This should reflect on your balance sheet that only 5k went into the income account while 2k was transferred into the expense account.

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