• From: USA, Pakistan
  • Registered: 03/14/2018
  • Posts: 11

Topic: stocking charges / shelf rent posting

I am in distribution business. I sell my product to my customers , End of the month I have to pay them shelf rent / stocking fee, I am getting a hard time to figure how to record this payment. I tried posting a payment under bank and GL , the money transfers fine from my bank account to the customer but then it the customer transaction it shows as an amount he ( customer ) owes me. which he doesn't owe as it is an expense for me for sales. what to do any help please

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2 Reply by stefan (edited by stefan 03/26/2018 12:38:23 pm)

  • stefan
  • Senior Member
  • Offline
  • From: Bulgaria
  • Registered: 01/14/2015
  • Posts: 64

Re: stocking charges / shelf rent posting

This explanation is somewhat confusing.

If you are paying some amount back to the buyers,  (it might sound like this, but I think it is not your case) best could be if you use some of the discount functions of the invoices.

If you are paying to the suppliers of the distributed goods - just create another Inventory Item (service type) for the rent/fee. You should get some kind of invoice for this - use this invoice with the service item, it will be tracked only for the payment...

If you are not paying to the suppliers, just receiving % of the sold goods, then they are currently your customer (for services). You have to create a supplier with the same details and track on the supplier part the payments to the same company.

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: stocking charges / shelf rent posting

Is it that you are sending goods to your customer (retailer) on the basis of some invoice raised on them and then if your goods remain unsold you have agreed to take return of it from your retailer and / or agree to pay the retailer for his shelf space rental as your prorata cost sharing agreement as you control the price at which your product must be sold to the end customer which if too high will render most unsold and make of poor returns to your retailer?

If this is the case, make the retailer a supplier of rental services to you and then make a Supplier invoice to the extent of the rental and then pay / adjust / allocate accordingly.

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  • From: USA, Pakistan
  • Registered: 03/14/2018
  • Posts: 11

Re: stocking charges / shelf rent posting

so if i understood right ,    if i have a customer who i pay monthly fee then i cannot record my transaction ( monthly fee ) with him as a customer. to solve my problem you are saying I have to make a supplier with the same details and track the payments with him as a service item ( monthly fee )and record my charges with him ( my customer ) as a supplier. Am i getting it right ?  this way i will have two separate records for the same person, one as customer to record sales and one as supplier to record fees. right ?

javed33's Website

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: stocking charges / shelf rent posting

Yes.

apmuthu's Website

  • From: USA, Pakistan
  • Registered: 03/14/2018
  • Posts: 11

Re: stocking charges / shelf rent posting

your last tip to  pay / adjust / allocate accordingly, can you explain that little more please. pay/ adjust / allocate the funds from where to where ?

javed33's Website

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: stocking charges / shelf rent posting

When the same company is both a customer and a supplier, allocations can be made separately if monies are available in ban/cash to make payment to supplier side and if receipts are available from the customer side to allocate to customer invoices.
If no such amounts in the bank and from the Customer receipts are available to allocate, a form of adjustment allocation is needed between the Customer side and Supplier Side of the same company.
A credit note equated debit note to sum zero will be needed.

For example, Company A supplies $ 100/- worth of goods and takes delivery of $75 worth of our products. If we pass a Journal Entry to transfer $75 from the supply side to the customer side to pay for the Sales Invoice, the allocations would not appear to have been done on both sides, but mere amounts tallied. Here we pass a Credit Note to the Customer Side and a matching debit note to the Supply side and then allocate the credit and debit notes to the customer and supplier invoices.

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  • From: USA, Pakistan
  • Registered: 03/14/2018
  • Posts: 11

Re: stocking charges / shelf rent posting

Got it. Thanks a million

javed33's Website