To properly track retail items* (section 1) given as gifts, you can choose from a couple of options depending on whether the recipient of the gift is known when the gift is given away.
Leave the type as a Sale, but give an offsetting 100% discount by entering 100 in the Disc% field. By leaving the type as a Sale, the printed invoice will display the value of the item being given.
Note: We do not recommend using the Gift sale type for section 1 retail items as it will not be included in your retail sales amounts for tax purposes.
- Create an invoice adding the items being given away.
- Set the sale Type as Sale and enter 100 in the Disc% field.
- Add any other items and payment if necessary to finish the invoice, then click Save.
If the intended recipient is unknown when your business is giving the product away for events such as a raffle or gift basket that has been created from multiple consultants, etc. it is handled differently. If the items are being donated to a charity, the invoice is handled similarly. See Handle Demos, Donations, or Expired/Product Loss for detailed steps.
- Create an invoice under your Business Supplies profile with the invoice Sale type as Business Supplies.
- Under the Discount section, ensure the discount type is set to Business Supplies, then from the Expense Category drop-down options, select the appropriate tax category.
- Mark the invoice paid by clicking in the Cash/Check field.
- When finished, click Save.
Note: Main Street cannot give tax advice, only general suggestions, and how to enter items into the Expense area in Boulevard. Please seek advice from your tax professional on how to handle personal expenses and income for your tax situation.
- Supplies (COG): Items used as section 1 demonstrators
- Gifts: Items for an event not tied to a specific recipient
- Advertising: Items used as a giveaway to obtain leads
- Charity: Items donated to a shelter or other charitable organization
- Expired/Lost: Product that is past its prime, and being thrown out. Another use for this category would be products lost or damaged in shipment to a customer.
See Handling Sales Tax on Discounted Items for more information about how tax is calculated when applying discounts.
* When adding section 2 items, the sale type will automatically default to Gift or Sample. Section 2 items are accounted for on the Product Purchases tax report.