I have a client that is in the Printing Industry. He printed 100 Gift
Certificates at $25.00 (donated). The client's invoice total was
$56.50 (he paid the $6.50 (taxes) by Point of Sales and now the
customer wants to redeem 2 X $25 Gift Certificate.
How do we process the Gift Certificates in Simply Accounting and/or
The printing of gift certificates does not give rise to any income or
expense (save for the printing cost).
When a gift certificate is sold, it's like a pre-payment on an account. It's
nothing more than a customer giving you $25 to hold till they come buy what
it is they want at some later date. The net entry would be to debit cash
and credit a liability called something like "gift certificates redeemable".
You should be able to set the account up as a liability, so when someone
buys the gift card, the sale gets recorded into the liability account.
The sale is rung up as any other sale is. The payment is in the form of a
gift card might be tricky. Instead of recording cash or charge, record it
as a gift card. Most modern registers can account for this in some manner.
All it does accounting wise is reduce the liability (you've already received
The Gift Certificates were never posted in the Accounting Software
because they were printed for "Give Aways" as a Promotions.
We already invoiced the customer for $56.50. The GST and PST taxes
were paid by a Credit Card. So the remaining balance of $50.00 is
still owed to us, so how do I process the Gift Certificates that the
customer brought in to cover the remaining balance of $50.00?
Not unsimilar to how you would post a discount, coupon, etc.
You could record the full sale and show the gift certificate as a contra
revenue account (most likely how it's going to happen). The cash isn't
touched. Credit Sales for the $50. Debit a "Gift Certificate Promotions"
account for the $50.
There are ways to set all this up in the software, as well as in the
registers (if you have one that's more than $100.)
You have to set the system up to show the "receipt" - not of cash or check -
but of the coupon or discount. It will be a debit to an expense or contra
Part of your "deposit" of his payment would not be to the bank, but to that
account. So in set-up where you establish the bank accounts to deposit to,
you set up this discount, coupon, etc account.
So let's make this a little easier to understand.
The sale is for $100 and the customer pays with a $20 off coupon. You
record the sale at $100, show $80 going to the bank and $20 going to the
discount. coupon, etc account.
Here you have a sale of $50 with all the payment going to the
Sale: CR $50
Coupons: DR $50
That's what your end result should look like.
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