Hello,

I'm new to accounting and MYOB Account Edge (Mac) and have what is probably considered a very basic question. This is in regards to cost of sales and invoicing a client.

Here is my scenario:

A client wants a video on 100 DVDs. I provide the authoring service for the DVD while a 3rd party provides the 100 duplications. From what I understand, what I pay to the 3rd party is listed as "cost of sales."

The question is this: Is this item listed in the invoice to my client, or is there a way to give the client an invoice for the total amount of the sale (my fees plus the 3rd party cost) so that they don't see the 'cost of sales' item, yet is recorded in Account Edge?

Another similar scenario:

I am asked to provide a middleman service thus: A client wants to have me duplicate 100 DVD so they provide me with a master, which I then pass on to a 3rd party to do the actual production. I want to charge 10% on top of the cost as a "service fee." When creating an invoice for the client, do I need to list my cost separately from my service fee, or can I just give them an invoice for the one line item (cost + 10%)?

Sorry for the verbose nature of this post. I hope I'm clear. Thank you.

-AndrewT

Andrew that is an interesting question.

We use cost of sales accounts for things we purchase and outsource. We show them on our invoices, though they show as marked up not at our direct cost. Clients don't seem to mind the detail, and we let them know up front in our contracts how our fee is derived.

I guess you could just treat the duplication as an overhead item and put it in an expense account. But I don't know how you would get it totaled in your invoice.

Donald

Buying Items (3rd party duplications) and selling the duplications (final product to customer) are 2 separate things that MYOB will automatically track for you. They can be the same item or different items. Either way the item will be set up with "I buy this item" that posts to the COS and the "I sell this item" that will be assigned to the Sales Income account. (you probably don't inventory these items.)

When you do a purchase order for the disks you had the 3rd party duplicate (so you can pay them for doing it) the purchase will use the "I buy this item" account to post your costs. The purchase costs are what you enter when you create those purchase invoices.
When you do a sales invoice it will use the "I sell this item" account for the income and will charge the amount you set on the selling detail tab for that item. This amount can have price breaks for quantity if you want. It is what you set and is not changed by the cost of the item even if that fluctualtes.

The purchase invoice does not show you what you sell the item for.
The customers invoice will not show what you paid for the item just the selling cost.
MYOB will automatically keep track of the COS and the Income when the items are set up correctly and you use the Enter Sales & Enter Purchases.


Dan

This message has been edited. Last edited by: Dan R,