First, I am no accounting expert so excuse me if anything I write below make no sense.
Consider a company that provides services to customers through a third-party. For example, a customer wants to move their furniture from point A to point B. The company finds a third party to do this job. The third-party quotes 100 to the company, the company adds a commission, for example 10% and quotes customer 110 + tax.
When the job is done, the customer either pays full amount to the third-party on-site via cash or pays via credit card where the funds are transferred to the company's bank account.
On certain periodic schedules, the company needs to settle the balances with all third parties, either pay them, or receive money from them depending on their balance.
Should we have an A/R for customers to keep track in case customer defaults on payment?
Should we have an A/R and A/P for the third parties to track their balance? or just have a Third-Party Payout expense account?
Should we record the full sale amount minus tax as revenue and record third-party payment as cost of services sold?
Thanks
Consider a company that provides services to customers through a third-party. For example, a customer wants to move their furniture from point A to point B. The company finds a third party to do this job. The third-party quotes 100 to the company, the company adds a commission, for example 10% and quotes customer 110 + tax.
When the job is done, the customer either pays full amount to the third-party on-site via cash or pays via credit card where the funds are transferred to the company's bank account.
On certain periodic schedules, the company needs to settle the balances with all third parties, either pay them, or receive money from them depending on their balance.
Should we have an A/R for customers to keep track in case customer defaults on payment?
Should we have an A/R and A/P for the third parties to track their balance? or just have a Third-Party Payout expense account?
Should we record the full sale amount minus tax as revenue and record third-party payment as cost of services sold?
Thanks