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A
Accountant_Wadley
April 1, 2025
Question

Need HELP accounting for a unique transactions.

  • April 1, 2025
  • 1 reply
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I work for a business focused on purchasing and reselling electronics. To optimize our procurement process, the company engages approximately 70 independent contractors who assist with sourcing electronics on our behalf using a company credit card that is issued to them. In return for their services, we provide a commission based on their contributions. Given the volume of transactions involved, managing the accounting and reconciling each contractor's account can be quite complex and time-consuming. What would be the most effective and efficient approach to handle these accounting transactions to ensure the electronics are being categorized properly as inventory, commissions are being accounted, and the credit card accounts are being reconciled property. Thank you for your guidance and suggestions. 

1 reply

T
Teri11_2
April 6, 2025

Sounds like you have two different types of accounting transactions:

1) Purchasing inventory - DR Inventory and CR Credit card account

2) Paying commissions - DR Commissions and CR Cash paid 

 

Setup separate GL accounts as CC liability accounts for each contractor, for example:

Account 2101 - CC Contractor #1 (I would use their initials in account name)

Account 2102 - CC Contractor #2 

Account 2103 - CC Contractor #3 

 

When you pay CC bills - DR CC account and CR Cash account

Use amounts in CC accounts to compute commissions for contractors

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