What's the proper way to set up promotional items?


D

David ~

The products that I distribute, I also give away as promotional items,
prizes at a competitions, "gifts" etc.... Most of these giveaways are
provided by the manufacturer, but some of them will sooner or later come out
of my pocket as well. When provided by the manufacturer, there is no cost
assigned to me. If I provide the giveaway, then there is a cost.

I currently have several products already set up as an Inventory Part under
the type field in the items list and the Income Acount is set up as Sales.
I then duplicated a few of these product entries, maintained the cost
associated with them, but did not enter a sales price. These duplicate
items are catagorized with an Income Account I set up as an expense called
Promotional Items

Is this the proper way to set up promotional items ? One one hand it seems
that I should have just one item for that product in the list, then identify
it as a sale or a promotional item, when I create invoices, but it doesn't
seem that's the right way to treat it when I'm creating an inventory (item)
receipt, especially when it come's in at no cost to me...

Then there's going to be other giveaways such as T-shirts and other trinkets
that I'll be buying from other vendors, but I don't think I'm as concerned
in setting those up as I am with the products above.

Any advice?

Thanks,

David...
 
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H

HeyBub

David said:
The products that I distribute, I also give away as promotional items,
prizes at a competitions, "gifts" etc.... Most of these giveaways
are provided by the manufacturer, but some of them will sooner or
later come out of my pocket as well. When provided by the
manufacturer, there is no cost assigned to me. If I provide the
giveaway, then there is a cost.
I currently have several products already set up as an Inventory Part
under the type field in the items list and the Income Acount is set
up as Sales. I then duplicated a few of these product entries,
maintained the cost associated with them, but did not enter a sales
price. These duplicate items are catagorized with an Income Account
I set up as an expense called Promotional Items

Is this the proper way to set up promotional items ? One one hand it
seems that I should have just one item for that product in the list,
then identify it as a sale or a promotional item, when I create
invoices, but it doesn't seem that's the right way to treat it when
I'm creating an inventory (item) receipt, especially when it come's
in at no cost to me...
Then there's going to be other giveaways such as T-shirts and other
trinkets that I'll be buying from other vendors, but I don't think
I'm as concerned in setting those up as I am with the products above.

Any advice?
One expense entry: Advertising.

You don't need (nor want) inventory. You don't sell these things, even at
zero. From an accounting standpoint, there's no difference between paying
for a customized T-shirt and a newspaper ad.
 
T

Tee

David ~ said:
The products that I distribute, I also give away as promotional items,
prizes at a competitions, "gifts" etc.... Most of these giveaways are
provided by the manufacturer, but some of them will sooner or later come
out of my pocket as well. When provided by the manufacturer, there is no
cost assigned to me. If I provide the giveaway, then there is a cost.

I currently have several products already set up as an Inventory Part
under the type field in the items list and the Income Acount is set up as
Sales. I then duplicated a few of these product entries, maintained the
cost associated with them, but did not enter a sales price. These
duplicate items are catagorized with an Income Account I set up as an
expense called Promotional Items

Is this the proper way to set up promotional items ? One one hand it
seems that I should have just one item for that product in the list, then
identify it as a sale or a promotional item, when I create invoices, but
it doesn't seem that's the right way to treat it when I'm creating an
inventory (item) receipt, especially when it come's in at no cost to me...

Then there's going to be other giveaways such as T-shirts and other
trinkets that I'll be buying from other vendors, but I don't think I'm as
concerned in setting those up as I am with the products above.

Any advice?
The way I do it for a retail client, s-corp, who carries everything as
inventory is:

Discount Item called Promotion tied to an Income Account called
Discounts:promotions

Promotional item is entered as normal. Next line down comes the Discount
item called Promotions (there are similar items called Charitable
Contributions, Door Prizes, etc) entered with the same prices as the item.
This zeroes out the the invoice, places the negative, or loss, under income
in a sub-account, and the accountant can do as he/she wishes with it at
year-end. Generally it goes to advertising via a journal entry but not
always.
 
A

Allan Martin

David ~ said:
The products that I distribute, I also give away as promotional items,
prizes at a competitions, "gifts" etc.... Most of these giveaways are
provided by the manufacturer, but some of them will sooner or later come
out of my pocket as well. When provided by the manufacturer, there is no
cost assigned to me. If I provide the giveaway, then there is a cost.

I currently have several products already set up as an Inventory Part
under the type field in the items list and the Income Acount is set up as
Sales. I then duplicated a few of these product entries, maintained the
cost associated with them, but did not enter a sales price. These
duplicate items are catagorized with an Income Account I set up as an
expense called Promotional Items

Is this the proper way to set up promotional items ?

You can but it really is not required. When you give away an item that you
normally stock, simply Adjust the Quantity/Value on Hand of the item and
post the adjustment to a promotion expense account of your choosing. Many
companies give away numerious items and it would become a real pain it they
have to keep duplicate item entries for each.

The true solution is having the ability to change the account number of the
cost of goods sold account on the fly when issuing a zero invoice for
promotional items. Mid-range accounting products like Accpac Advantage have
this feature.











One one hand it seems
 
Joined
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Hi!
What all do you have as promotional items? I want to buy for my employees.
Thanks
 
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