Ad Agency Accounts Help Needed

[jct9841]

Hello,

I am about to set up my wife's new Advertising Agency in QB and wonder if anyone has a sample chart of accounts to go by?

She will be buying commissionable media from TV/Radio with Purchase Orders. $1000

She will pay media bills less 15% commission. $850.

She will bill the customer for the entire amount. $1000
How do we track 15% commission?

What kinds of accounts should these be?

Thanks in advance,
John

[Wartrace]

Somebody may have a better idea however I would just use a two sided non-inventory item for the advertisement buys using the purchase order. I would be sure to use the customer name/job on the purchase order.

Purchase order for 850 media buy for a non-inventory item (whatever you want to call it) using the customer name/job on the P.O.

Create an invoice for the customer for 1000 dollars. The 1000 would go to revenue and the 850 to COGS leaving the 15% as gross income.

If all your revenue is from this business is commission then your gross income would be your commission income.

If you have several sources of income I would set up several revenue accounts such as commission revenue, xxx revenue, yyy revenue and point the item income to the account desired.

[jct9841]

Wartrace,

The PO to the TV station is for the full 1000.
They invoice us for 1000 less 15%.

How do I break up the 1000 to revenue and 850 to cogs. when i receive payments?

Thanks for the quick reply.

Are you in Wartrace TN?

John

[Wartrace]

Originally Posted by jct9841

Wartrace,

The PO to the TV station is for the full 1000.
They invoice us for 1000 less 15%.

How do I break up the 1000 to revenue and 850 to cogs. when i receive payments?

Thanks for the quick reply.

Are you in Wartrace TN?

John

Yes, just 5 miles outside of town near Bedford lake.

The P.O. is a non posting document so it doesn't matter what amount is on the P.O., all that matters is what appears on the bill you enter. What I would do is create the P.O. for the 1000.00, when you convert it to a bill you change the amount to 850 (the actual cost) which would be the amount that hits your COGS account.

If you are on the accrual basis the minute you enter the bill for 850 dollars it will be included in your COGS. When you create an invoice to the customer for 1000 dollars that will be shown as revenue. 1000 less 850 = gross profit on the sale.

[jct9841]

John,

Thanks!

Now how would you suggest tracking commission?

We are charging 15% for all media placement and commission will be paid to several different sales reps based on the customer account.

I've tried defining a custom field for the invoice but it does not calculate anything.

I am down the road in Fayetteville.

John

[Wartrace]

Commission tracking (for payment to sales reps) is something that QuickBooks doesn't do very well on its own. You should make sure you enter all sales reps in your sales rep list (found under Lists>customer and vendor profile lists).

Make sure you have the sales rep box set up on the invoice so you can track invoices to sales reps. (it should be already set up that way). Enter the rep on every invoice.

As I stated, QuickBooks isn't very good about tracking commissions, particularly if you only want to pay after a customer pays the invoice. You have several options available though:

1) Manually in an excel spreadsheet. You would have to create a custom transaction detail report by "rep" and then filter it by "invoice" and paid status for "paid". The problem with QuickBooks is you do not have any way to use formulas in the report so you would have to export it to excel to figure out the sales rep commission. ALSO you will have to be real careful about tracking which invoices you have paid on already.

2) Xpandedreports - http://xpandedreports.com/index.php/
This is a great tool that does commission reporting and many other reports you can't pull from QuickBooks alone. I highly recommend it; they offer a thirty day trial to see if it fits your needs.

3) One of the dedicated commission reporting add on programs found here;
http://marketplace.intuit.com/v2/f-s...solutions.aspx