I started to work for an app developer whose income is purely commission basis.
The business structure is that we have patients who do online consultations with the doctor using our app. We charge per hour basis, the patient pays to us and at the end of the month, we keep our commission and pay the rest to the doctors.
So for example, we generate $1000 in a month we keep our commission of $200 and pay the rest to the doctor. What is the best accounting treatment in this case?
Any advice will be appreciated.
Who would the business be invoicing - the patient or the doctor?
I would say both. Patients will instantly pay us when they start the session and doctors will be invoiced at month end with details of the commission collected.
^This might not sound right. Hence I am willing to get an opinion Sir.
It would really depend on the business - your client may be better to answer that question rather than me.
However, we’ll leave this thread open for other users to add their suggestions for you.
Confused with your reply. The question was who are the customers paying. Your reply was both, the customer pays you and you invoice doctor. Which isn’t both.
If the customer pays you, and you self bill the doctor, then your effectively collecting income less commission for the doctor.
What you need is to get clarification from hmrc as to whether only the commission is classed as income, or the whole lot is. Once you have your answer I’d be better placed to advise how you structure your accounting treatment.
I don’t know if the use of the dollar symbol is accidental and should have been a pound symbol. If not this is a forum for an accounting package integrated with the British tax system. If you are in another jurusdiction then this isn’t really the right forum to advise.