Handle Demos, Donations, or Expired/Product Loss

To handle section 1 items used as demonstrators, products being donated, lost, expired, or other similar business-related situations, we recommend creating one profile called Business Supplies to invoice and remove them from inventory. Invoices that are coded with the sale type of Business Supplies will also prompt for an expense category. Once an expense category is selected and the invoice saved, an entry will automatically be created so that your tax reports reflect the items being removed from inventory and expensed out as well.

Note: The steps below should only be used for section 1 (retail) items. Section 2 items (supplies) are tracked and expensed through the Product Purchases report.

Step 1: Create a Business Supplies Profile (if necessary)

If you have not created a Business Supplies profile already, follow the steps below. Only one profile needs to be created to handle all situations for multiple tax years. When running tax reports, only invoices and expense entries that are within the date range set will be included.

1. Create a customer profile called Business Supplies.
2. From the profile toolbar select Utilities, then Settings.
3. Under the Discounts drop-down list select Business Supplies (this will set the Invoice Followup to 0 days, Email Invoice to No, and the Discount to 50% which can be adjusted).
4. Under Options, check to Exclude from Dashboard. 
5. Click   OK   to close Profile Settings, and when prompted to save, click Yes.
6. Click  Save then close the profile.

Step 2: Create the Expense Category (if necessary)

If you do not have separate expense categories already created to handle demos, expired or product lost in shipment, donations, etc., see Expense Categories & Payees to create the appropriate categories before continuing to Step 3.

Suggested Categories used when invoicing Business Supplies:

• Supplies (COG): Items used as section 1 demos
• 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 (See Track Product Expiration Dates for more information). Another use for this category would be products lost or damaged in shipment to a customer.

Step 3: Invoice & Select the Expense Category

When you invoice the Business Supplies profile for section 1 demos, donations, lost, damaged, or expired products it is similar to invoicing for personal use except that an expense entry is added after you select an Expense Category and save the invoice.

1. Create a new invoice for the items under the Business Supplies profile.
2.  Under the Discount section, select the appropriate category from the Expense Category drop-down list (use suggestions from Step 2 above or seek advice from your tax professional).
3. Click to the left of the Cash/Check field to mark the invoice as paid in full.
4. For additional information, enter a short description in the Memo field (such as Demo, Expired, or Charity).
5. When finished, click  Save.

Tip:  By invoicing your Business Supplies profile for situations when items are being removed from inventory for the situations mentioned above, all of the invoices will be grouped and easily accessible on the Gross Receipts report, or can be printed separately (see Filter Invoices by Name, Invoice, or Discount Type for detailed steps).

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Additional Information:

Filter Invoices by Name, Invoice, or Discount Type