You sell Gift Certificates to customers and want to account for these in a way that doesn't recognise the revenue now but treats it as a deposit until the certificate is used or expires. Solution:
Set up the Gift Certificate as an Item
- Select Add > Item.
- Give the item a name such as CERT50. This might be for a $50 Gift Certificate (the description for the item).
- Choose the I Sell this Item option.
- Change the Income account in the I Sell this Item section to be Liability: Gift Certificates or similar.
- Don't choose a tax code if, under the law for your tax zone, you aren't liable to pay tax until the Certificate is used. Otherwise choose an appropriate tax code. Speak to your accountant if you need specific advice on this.
- Set the selling price to $50.
- Ensure the toggle for Inc Tax is set correctly for this price.
- Save the item.
- Duplicate for other Gift Certificates values that you need to set up.
The Customer buys a Gift Certificate and you enter a Sale
- Enter the sale as normal but select the CERT50 item you set up as above.
- Accept and apply payment to the transaction to close it.
- If you have created a Template Theme for Gift Certificates in Saasu, you can use this to print your Invoice/Receipt along with its Certificate to give to your customer.
NOTE: Sometimes it may be easier to print gift certificates on separate templates. i.e. Print the Invoice using your standard template and build another template specifically for printing a certificate. An example of this would be if you print them on a different printer in colour as opposed to your normal docket/A4/Letter printer.
In this transaction, Saasu has accounted for the Sale in the Liability Account called Liability: Gift Certificates pending its use by the recipient of the Gift Certificate.
Gift Certificate Recipient Returns to Redeem Gift Certificate for Goods and/or Services
- Select Add > Sale.
- Choose the gift certificate Item Code but set the quantity to minus one (-1). This will generate a -$50 amount in your sale. It has the effect of reversing the amount out from the Liability: Gift Certificates account.
- Add more line items to the sale and for the products and services they are buying from you with the appropriate tax code.
- Apply a payment to the sale for $0 if the Purchased Item matches the Gift Certificate value. Otherwise take payment for the difference and apply it in order to close the Sale.