Please can someone help me, I have been out of the accounting/bookkeeping industry for several years so am VERY rusty.
My husband owns his own business its currently registered as a sole proprietor. he creates bespoke software for clients. We outsource some of the work and that is straight forward. The part I am confused about is how do I capture his time for the development.
Here are 2 examples:
1) We charge the customer for 103 hours of work at 570.00 per hour but we actually did 195 hours with his cost at R450 per hour (salary bill/owners equity?). We cant increase our selling price as it was an accepted quote and the error was on our side because we under quoted.
2) We charged the customer for 80 hours at R750 per hour with his cost at R450 per hour. In this case it was pretty spot on.
How do i account for this COS? Dr COS, Cr Owner's equity or salary? or just leave it?
The second issue I have is we have done work on risk where we have put in the time but the product has never gone to market. How do I write off that cost? Some products are a clean write off while others are still sitting in R&D to be expensed once that product goes to market.
Will this remain the same procedure once we are registered as a Pty Ltd or will i have to change my processes?
Your help in this regard is greatly appreciated
My husband owns his own business its currently registered as a sole proprietor. he creates bespoke software for clients. We outsource some of the work and that is straight forward. The part I am confused about is how do I capture his time for the development.
Here are 2 examples:
1) We charge the customer for 103 hours of work at 570.00 per hour but we actually did 195 hours with his cost at R450 per hour (salary bill/owners equity?). We cant increase our selling price as it was an accepted quote and the error was on our side because we under quoted.
2) We charged the customer for 80 hours at R750 per hour with his cost at R450 per hour. In this case it was pretty spot on.
How do i account for this COS? Dr COS, Cr Owner's equity or salary? or just leave it?
The second issue I have is we have done work on risk where we have put in the time but the product has never gone to market. How do I write off that cost? Some products are a clean write off while others are still sitting in R&D to be expensed once that product goes to market.
Will this remain the same procedure once we are registered as a Pty Ltd or will i have to change my processes?
Your help in this regard is greatly appreciated