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What's the proper way to set up promotional items?

The products that I distribute, I also give away as promotional items, prizes at a competitions, "gifts" etc.... Most of these giveaways are provided by the manufacturer, but some of them will sooner or later come out of my pocket as well. When provided by the manufacturer, there is no cost assigned to me. If I provide the giveaway, then there is a cost.

I currently have several products already set up as an Inventory Part under the type field in the items list and the Income Acount is set up as Sales. I then duplicated a few of these product entries, maintained the cost associated with them, but did not enter a sales price. These duplicate items are catagorized with an Income Account I set up as an expense called Promotional Items

Is this the proper way to set up promotional items ? One one hand it seems that I should have just one item for that product in the list, then identify it as a sale or a promotional item, when I create invoices, but it doesn't seem that's the right way to treat it when I'm creating an inventory (item) receipt, especially when it come's in at no cost to me...

Then there's going to be other giveaways such as T-shirts and other trinkets that I'll be buying from other vendors, but I don't think I'm as concerned in setting those up as I am with the products above.

Any advice?

Thanks,

David...

Reply to
David ~
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One expense entry: Advertising.

You don't need (nor want) inventory. You don't sell these things, even at zero. From an accounting standpoint, there's no difference between paying for a customized T-shirt and a newspaper ad.

Reply to
HeyBub

The way I do it for a retail client, s-corp, who carries everything as inventory is:

Discount Item called Promotion tied to an Income Account called Discounts:Promotions

Promotional item is entered as normal. Next line down comes the Discount item called Promotions (there are similar items called Charitable Contributions, Door Prizes, etc) entered with the same prices as the item. This zeroes out the the invoice, places the negative, or loss, under income in a sub-account, and the accountant can do as he/she wishes with it at year-end. Generally it goes to advertising via a journal entry but not always.

Reply to
Tee

You can but it really is not required. When you give away an item that you normally stock, simply Adjust the Quantity/Value on Hand of the item and post the adjustment to a promotion expense account of your choosing. Many companies give away numerious items and it would become a real pain it they have to keep duplicate item entries for each.

The true solution is having the ability to change the account number of the cost of goods sold account on the fly when issuing a zero invoice for promotional items. Mid-range accounting products like Accpac Advantage have this feature.

One one hand it seems

Reply to
Allan Martin

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