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  • #979009
    EmbalmSkincare
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    Hi everyone,

    Long time no hear you may think… I needed a break from it all along with some other things.

    But I’m rested now and ready to launch in a few days.

    I have a few A ccounting questions while I’m sitting over all the invoices I need to enter into the accounting software.

    Could someone please help me with:

    – Business Cards: Is it Cost of Sales or Expenses? Advertising or Sundry?

    – What happens if the invoice date is wrong? I know this as I have waited with this purchase until I registered my ABN and also for GST. After I registered, I purchased something on that DAY and looking at the invoice now, it actually is one day before. What do I do? I can’t really cross out the date on the invoice and write the correct date down, can I?

    – Next question is about a mix up of Invoice To and Shipped To. Does it matter if it’s not Invoiced to my business name but to me and my husband?

    – Laptop: Extended Warranty? I know Laptop is Asset but where do I put the Extended Warranty?

    Thanks so much in advance!

    Kind regards,
    Mel

    #1111376
    JacquiPryor
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    Hi Mel,

    Think I can answer a couple of these questions for you – and hopefully an accountant will be along soon to help with the others:

    Business Cards: Is it Cost of Sales or Expenses? Advertising or Sundry?

    Advertising itself would generally be an expense rather than cost of sale; Personally, I put my business cards down as Business Expense/Advertising; The general rule I was taught is that an expense is incurred for something needed to run/operate your business; a cost of sale should directly relate to an invoice you send to a client – a direct result of providing the product/service to the client.

    – What happens if the invoice date is wrong? I know this as I have waited with this purchase until I registered my ABN and also for GST. After I registered, I purchased something on that DAY and looking at the invoice now, it actually is one day before. What do I do? I can’t really cross out the date on the invoice and write the correct date down, can I?

    First thing I would do is contact the supplier and note that you purchased on X date but the invoice is the day earlier – could they please re-issue? I am wondering if this is an overseas purchase? Where they were perhaps a date behind? (In which case, it shouldn’t affect GST one way or the other).

    Invoice To and Shipped To. Does it matter if it’s not Invoiced to my business name but to me and my husband?

    Again, I would ask the supplier to reissue in the correct name. Most businesses should be willing to do this on request (I know I would). Failing that, if you are operating as a sole trader (and, hoping accountant will confirm this) it shouldn’t matter too much. As a sole trader, you are the entity trading as business name -so all income/expenses etc goes against your personal tax and against the ABN. If the ABN is quoted on the invoice then this should still be traceable and count as a business expense even if it was invoiced to you personally. If you are operating a company it could be different, as it would be treated as a separate entity.

    As to the extended warranty for your laptop, I would assume that’s an expense but really not sure on that one…

    You must be pretty excited about the launch?! Hope all goes smoothly for you!

    #1111377
    Past-Member
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    In your Expenses – you can have items like Advertising including Online Advertising, Printing, Photography, Accountant Fees, Car fees & Insurance, Business Insurances, Phones, Rental Agreements, Business Memberships, Bank Fees, Postage & Couriers, Legal, Services (Electricity/Gas), Travel Expenses, Subscriptions, Small Assets, Art/Paper/Stationery, Seminars, Trade Fairs, Networking and more. You can also make sub-categories within if you want to read reports on the breakup. For example, under Advertising you could have subcategories of Newspapers, Magazines, Online (web). Some people put Couriers and postage in Cost of Sales, but my accountant is happy with it listed under Expenses as long as it’s clear.

    Organise your expenses categories to what makes sense for you.

    Cheers.

    #1111378
    ntgd
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    Hi Mel,

    Your business card expense will be general expense, so you can put that under your advertising expenses.

    Those invoice date issue should be an easy fix by contacting them as suggest by others.

    Extended warranty on your laptop would be an expense.

    How you structure your chart of accounts will depends on your business type and what you want to see on the financial report. If you want a more concise report then have less categories. If there are things you want detail break up for then add a few more sub-accounts. Your chart of accounts should suit your need at the time so when you read the report it make sense to you.

    Your chart of accounts should also change over time as you progress to remain relevant to you, you can’t use the same chart of account forever, otherwise you won’t get meaningful information from your numbers.

    Besh wishes for your business.

    #1111379
    ABC
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    Hi there. I am no accountant but was taught that expense relates to costs associated with benefits that are used up in one accounting period (1 year). If the extended warranty is paid for more than one year, then you may only be able to claim part of the cost this year. The same would apply to laptops etc?

    Any accountants who can clarify?

    Thanks
    abcvic

    #1111380
    EmbalmSkincare
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    Hi everyone,

    Thanks for getting back to me on those accounting questions!

    I was able to get an amended invoice with the correct invoice date.

    Will put Extended Warranty under the tab Expenses: Insurance as EW is considered an insurance product.

    Thanks again!

    Kind regards,
    Mel

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