Hi. Looking for some advice on logging a sales commision.
We have a client who we do regular work for. We give him a price and he then puts his own markup on top to his client and he pays us our fee when the job is complete, keeping his own mark up.
For this next job though he has given the marked up price to his client but told them to come direct to us. We’ve to invoice his client the marked up fee, deduct our fee and then send our client the difference between the two. My concern though is if I invoice the customer the higher fee my accounts will show a higher turnover and also be liable to additional tax and vat. Would logging this as a sales commission rebalance the turnover/tax/vat or is there another way to log this.
If you are invoicing the client yourself, with the higher fee (with the additional mark up), as far as your accounts are concerned the income is yours.
From what you’ve described, it sounds similar to an affiliate or referral fee is being paid to the person who told the client to go direct. In this case, you may find the below topic helpful:
We’ll leave this thread open for other users to add their comments, as I’m sure there are other users doing something similar.
I was looking at this for commision based sales as this would not come under the CIS scheme.
Also was considering it on every re-order of our services on receipt of full payment from the salesmans/our client, like an automatic 1% to 10% on all sales for the sales person from a particular client.