Freelance suppliers and equipment rental

[foneacar]

Hi,

I need to know how to accurately record the following in Sage:

We rent equipment to self emplyed drivers who then offset that rental by carrying out account work for us. Then this account work has a surcharge applied and the end client is charged a single amount. I need to know how to replicate this without screwing up my accounts and Sage showing I have turned over more than I do.

For Example:

Driver A: Rent = £118. Account work = £145 (total owed to driver = £27)
Driver B: Rent = £118. Account work = £90 (total owed TO US = £28)

Driver C does a job for £10, we invoice the customer £12. How do we show this?

Thanks

Dom

[brucedenney]

I think you need to be clear about what is going on.

I look at it like this

You sell to Customer £145
You purchase from SelfEmp £145
You sell to SelfEmp £118

Your turnover is £263

What did you think your turnover was??

Or

Perhaps you are managing the billing on behalf of the SelfEmp it is the SelfEmp that invoices the customer (Their name appears on the invoice, their VAT reg no (if they are VAT reg) , You collect the money on behalf of the SelfEmp, and pay it over to the SelfEmp.

The only transaction that you are involved in is the Rent to the SelfEmp (which one assumes includes the billing management service for them)

Or

Something else...

[foneacar]

Hi Bruce,

Thanks for getting back to me.

I think I am just trying to make sure I don't get figures that are over inflated. For example (as I understand sage!):

Equipment Rental = Sales Type A (EquipRental)
Client Invoice = Sales Type B (InvIncSvcChg)

Account Cost of Sales = Purchase Type A (WorkDoneByDriver)

If I am not careful my T/O will show the rental plus the full amount of the invoice, with the Account Cost of Sales being a cost of sales item on my P&L.

All I need to show as T/O is the Equipment Rental plus the Surcharge we make to clients on the contract work.

The issue I have is that a driver could be in two states:

I owe him money as his contract work is more than the rental
He owes us money as his contract work is less than his rental

How am I best to show this as I just want to send a single cost off to clients as they can get funny about service charges etc

Thanks

Dom

[brucedenney]

I don't think you can't do that that because the both sales are in your books and both are subject to VAT reporting on your VAT registration.

I think you should seek the advice of a Qualified Accountant.

You will offset the Cost of Sales against the Income from the Customer when you calculate your profit.
You can put the Cost of Sales and the Customer Turnover in separate account so you know what they are.
If you artificially reduce your Sales and your Cost of Sales (and your turnover) then you are misrepresenting the financial transactions that the business is doing.


To show things the way you want, you would have to not be involved in the sale to the Customer, the "Driver" would need to make the sale to the customer not you, he would raise the invoice on his VAT registration not yours.

There is nothing to stop you raising the invoices on his behalf, providing him with a service to collect his debts for him etc... But if you invoice the customer and the driver than both transactions are part of your turnover.