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  • #989335
    Byron Trzeciak
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    Hi There,

    I was hoping to gain some advice on GST and buying items on behalf of client’s. I want to double check I’m handling it the right way.

    I purchase a number of items on behalf on my client’s that include GST when I buy them.

    These charges are then applied to the client invoice. Let’s say that I buy item A for 24.50 inc GST and then for ease of calculation I apply this to the customers invoice at say 25.00 which becomes 27.50 Inc GST.

    I guess it’s similiar to a wholesale I buy item A for 10 dollars and then on sell that to the client for $15 for example.

    These particular Items I’m not looking to make a profit on the sale so I could onsell for the same price that I purchased as it doesn’t really make a huge difference to round it.

    Does this make sense, any advice would be appreciated.

    Byron

    #1171646
    Jason@Plumsale
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    That all makes perfect sense.. I can’t see any issues.

    #1171647
    Gizmo
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    Byron Trzeciak, post: 199271 wrote:
    Hi There,

    I was hoping to gain some advice on GST and buying items on behalf of client’s. I want to double check I’m handling it the right way.

    I purchase a number of items on behalf on my client’s that include GST when I buy them.

    These charges are then applied to the client invoice. Let’s say that I buy item A for 24.50 inc GST and then for ease of calculation I apply this to the customers invoice at say 25.00 which becomes 27.50 Inc GST.

    I guess it’s similiar to a wholesale I buy item A for 10 dollars and then on sell that to the client for $15 for example.

    These particular Items I’m not looking to make a profit on the sale so I could onsell for the same price that I purchased as it doesn’t really make a huge difference to round it.

    Does this make sense, any advice would be appreciated.

    Byron

    Looks good.

    But to be clear as you said you do not want to make money.

    In the example you outlined…
    You where charged 22.27 ex GST
    You then passed on the cost at $25 ex GST

    So you did make a profit of $2.73 ex GST.
    Sure its not much is this what you meant by no profit, i.e. close to nothing?

    #1171648
    bb1
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    I would ask the question why you don’t want to make a profit, isnt the idea of been in business and providing a service is to make money out of it, you are effectively making a loss as you have spent your time purchasing the items, onselling and invoicing for the items.

    #1171649
    Byron Trzeciak
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    That’s correct. So I would typically make a small amount on this sale but it’s minimal and would not be a problem if I had to charge the exact amount.

    Let’s say I buy for $2.5 inc GST

    I might sell it for $5 inc GST just to round the number off.

    on the other hand i could

    buy for $2.5 inc GST and sell it for the exact same price. Does it make any difference? or do I need to do anything differently to manage the scenarios?

    As long as I’m getting back what I spend in this instance I’m not worried. I typically round up just to make the invoice look a little less confusing for client’s.

    #1171650
    Gizmo
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    Hello,

    You could just pass on the cost without changing it.
    Only thing you need to consider in either scenario is if GST needs to be applied or not.

    But as BB1 pointed out, why not charge for it?

    You have now spent time invoicing it.
    You will spend time or pay someone to book keep it correctly for you.
    Depending on what it is you may even have to spend time covering off with the client.

    #1171651
    FalzonFinancial
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    Byron,

    As noted below, if you charge slightly more, you are only receiving the incremental income, less the GST received.

    For instance if it cost $100 (inclusive of GST), and you invoice $120 (inclusive of GST), you would only receive:
    $18.18 income, as your GST liability is $1.82.

    If you are only charging a few dollars more, consider the above admin implications.

    Matthew

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