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Commission payable on sale of service

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Rosepose
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Commission payable on sale of service

Hello, we sell our services through a booking agent who pay us the total amount for our service, less their commission, and provide us with a 'recipient created tax invoice'.  Is it sufficient for the purposes of BAS for me to record the transaction as one bill, having one line as the total cost of the service (income a/c), then the second line for commission, recorded as a negative dollar value (cost of sale a/c) - essentially deducting the gst paid from the gst received in the same transaction? I'd like to keep things as simple as possible.

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Steven_M
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Re: Commission payable on sale of service

Hi @Rosepose

 

I would recommend speaking with an accountant in regards to the best practice to record that transaction. However, from an AccountRight point of view, as the transaction is a sales it will all be reported as a GST collected, a negative value of a sale will just reduce the GST collected.

Kind regards,
Steven

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ronatbas
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Re: Commission payable on sale of service

@Rosepose

 

Wouldn't it be good - if it worked and if it was legal. At an MYOB level it will not work because a negative amount in a receive money/ payment/ invoice will create a negative  GST Collected not a positive GST Paid. Effect will will be that for a given transaction you will be understating 1A and 1B. One of the first tests the ATO does is checks that 1A is 1/11 of G1 - come end year they will expect a figure at G3 to cover the difference.

Ron B
BAS Group
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info@basgroup.com.au
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Rosepose
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Re: Commission payable on sale of service

Beautiful explanation... this makes a lot of sense.  I appreciate your assistance Smiley Happy

 

AlanT
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Re: Commission payable on sale of service

Hi Ron,

 

I noticed that Rosepose posted the question in the Essentials forums.  There was a recent update to the Essentials Bank feeds that would correctly account for a negative item to swap it to either GST Collected (in negative payments) or GST Paid (in negative receipts).

 

@Steven_Mcan you confirm this will still work if it is entered as a Bill or would it have to be coded at the bank feed side of the entry.

 

AlanT

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