Reports & Bookkeeping – best practices
There are a number of reports that are relevant to your bookkeeping. This article suggests the best way to handle accounting
We basically provide 2 reports for your bookkeeping, which to the naked eye are very similar but have vastly different purposes.
- Payout Reports
- Sales Reports (with underlying breakdown)
- Organizer account statement
- Event statements
Since this article is aimed at bookkeepers, there will be some concepts and some logic that will require some experience with bookkeeping to make sense. Are you familiar with assets and liabilities? Do you know the difference between balance and operations? Are you aware of accruals and know the importance of them in accounting? If not, you’ll probably need some help.
Method for commission
Our commission can be handled in two different ways in accounting. It is up to you which method you choose, but it is important to use the same method for all postings. To keep things simple, we have used method 2 below for this article.
- Ticket sales can be booked with gross sales if the commission is simultaneously posted to an account separately
- Ticket sales can be posted net, after commission – this bypasses the commission in your bookkeeping
All ticket sales are calculated from Monday to Sunday and are paid out as a total sum the following Wednesday. Our payout reports also contain specifications for each event, but it can quickly become an incredibly large administrative task to post at the event level while differentiating between the sales period and the payout date – often for events that are still on sale but really only have need to be settled in the accounts when the sale is over.
Therefore, we recommend a very simple approach to the payouts, which are posted without further specification into a reconciliation account under your assets. You can also use a debtor account for the purpose, the most important thing is to make sure to use the correct posting date, which must match the date available on the bank.
- Debit on “Bank” (assets)
- Credit on eg. “Ticket sales payable” (assets)
Sales for an event typically run over a long period of time, and your management can keep an eye on sales in Event Manager, but there is rarely a need to keep the bookkeeping as real-time as it is for sales and marketing people to have an overview at all times. Most organizers can restrain to posting the ticket sales every month, quarter or maybe until the event has been executed and the performers needs a settlement.
When you want to post the sale, you can draw a report from Event Manager, where all sales for a given period are calculated and specified. The report provides a summary of all your events on page 1, followed by specifications for each event on the remaining pages.
This is where the reconciliation account from the payouts comes into play again, because so far only credit postings have been posted on it. But sales are now posted either collectively for all your events or individually at event level. For example, the posting date will be April 30 for April sales, June 30 for 2nd quarter sales, etc.
- Debit on “Ticket sales payable” (assets)
- Credit for “Ticket sales” (result)
Gift card sales represent a down payment to you from a buyer. Once the gift cards is redeemed, the value moves from liabilities to your result. There are three stages to the bookkeeping of gift cards:
- Gift card sales
- Gift card payouts
- Redeemed gift cards
Gift card sales
The sale is registered as regular ticket sales and will therefore appear in the sales report as an “event” called “Gift Card”. But in principle, the bookkeeping handles an advance, not a sale.
- Debit on “Ticket sales payable” (assets)
- Credit on “Gift card pre-payments” (liabilities)
Gift Card Payouts
The posting of payments is unchanged from the method above. Gift cardsales are paid out just like any other event, and there is no need to split the transactions yet. But when the sales report is posted, there will be some more posts to keep aligned.
Redeemed gift cards
When the gift card is redeemed, the value is redeployed to the specific event so that it can be settled correctly with any performers. At the same time, “Gift card prepayments” are offset as this balance is used by the gift card holder and will no longer be a “due” item in the bookkeeping. So two things happen:
- Specific ticket sold
- Gift card redeemed
Ticket sales made with a gift card are registered exactly as regular ticket sales, and will therefore also be automatically posted to your books with the rest of the ticket sales if you follow the process of this article. But that means that the part of the ticket sales that has been completed with a gift card will now be carried twice to the “Ticket sales payable” – once with the gift card “event” and once with the specific event. The sum of redeemed gift cards is shown on page 1 of the sales report – the overview for your entire organizer account – and it must now be offset in the balance sheet.
- Debit on “Gift card prepayments” (liabilities)
- Credit on “Ticket sales receivable” (assets)
Refunds are specified in the sales report – bookkeeping guide is on the way.
Conversions do not appear as a transaction for themselves in the sales report, but consist of both a refund and a sale of respectively gift cards or donations – bookkeeping guide is on the way.
- Post payouts on a weekly basis to a reconciliation account
- Post sales monthly, quarterly or settlement wise to the same reconciliation account
- Post gift cards to another reconciliation account, settle upon redemption