Hi everyone!
I'm currently in the processes of creating a start-up food delivery company and I'm having a hard time wrapping my head around the accounting setup required for my specific situation.
First off, this is our business model: We will be proving delivery service for local restaurants in our area. Clients will place orders over the phone, using our app, or directly on our website. We then forward the order to the desired restaurant, pick up the order, and have it delivered to the customer. WE charge the customer for the entire order upfront. Then, after X amount of days, we pay the restaurant what is owed to them for the food, minus a commission and flat fee.
Here's a simple Example:
Customer orders food for a total of $22.50 ($20.00 for the food, $2.50 for delivery fee which we keep).
Customer pays us by credit card or cash, and we receive the entire $22.50
We then charge the restaurant a 10% commission + $1 flat fee.
In the end, we owe the restaurant $17 (minus $2 for commission + $1 for fee).
Now this is where it gets somewhat complicated for me. Using the example above, say we also charge the restaurant a $30 fee for premium advertising on our site. In this case, the restaurant will OWE US $13 at the end of the billing period if we utilize the $17 that we originally owed to them as credit against the $30 advertising fee. Its important to note that there will be situations in which WE owe the restaurant, the restaurant owes us, or on rare occasions, it washes out.
How would you handle the above situation? Would credit notes be applicable in this situation? How could we offset the payable with the receivable without it becoming a jumbled mess? Any ideas would be GREATLY appreciated!!!!! Thank you!
I'm currently in the processes of creating a start-up food delivery company and I'm having a hard time wrapping my head around the accounting setup required for my specific situation.
First off, this is our business model: We will be proving delivery service for local restaurants in our area. Clients will place orders over the phone, using our app, or directly on our website. We then forward the order to the desired restaurant, pick up the order, and have it delivered to the customer. WE charge the customer for the entire order upfront. Then, after X amount of days, we pay the restaurant what is owed to them for the food, minus a commission and flat fee.
Here's a simple Example:
Customer orders food for a total of $22.50 ($20.00 for the food, $2.50 for delivery fee which we keep).
Customer pays us by credit card or cash, and we receive the entire $22.50
We then charge the restaurant a 10% commission + $1 flat fee.
In the end, we owe the restaurant $17 (minus $2 for commission + $1 for fee).
Now this is where it gets somewhat complicated for me. Using the example above, say we also charge the restaurant a $30 fee for premium advertising on our site. In this case, the restaurant will OWE US $13 at the end of the billing period if we utilize the $17 that we originally owed to them as credit against the $30 advertising fee. Its important to note that there will be situations in which WE owe the restaurant, the restaurant owes us, or on rare occasions, it washes out.
How would you handle the above situation? Would credit notes be applicable in this situation? How could we offset the payable with the receivable without it becoming a jumbled mess? Any ideas would be GREATLY appreciated!!!!! Thank you!
