How do you account for refunds in end of month accounting?
Hi All,
Noob question
How do you account for refunds in end of month accounting
I assume you go to generate transaction report for the month, download the excel and then work with the data there (or maybe copy into your own template)
I notice orders come across something like this:
Order 1 unit x for 5 GBP
Refund 1 unit x for 5 GBP
When working out cost of good sold for the above scenario, a unit hasn’t been consumed (its been given to the customer and then given back to you for resale), so you retain your unit so no cost of good sold is applied (though you do pay a return fee)
How do you account for this in the raw excel download you get from generating a report?
Please highlight anywhere i may be going wrong in this assumption
Many thanks!
How do you account for refunds in end of month accounting?
Hi All,
Noob question
How do you account for refunds in end of month accounting
I assume you go to generate transaction report for the month, download the excel and then work with the data there (or maybe copy into your own template)
I notice orders come across something like this:
Order 1 unit x for 5 GBP
Refund 1 unit x for 5 GBP
When working out cost of good sold for the above scenario, a unit hasn’t been consumed (its been given to the customer and then given back to you for resale), so you retain your unit so no cost of good sold is applied (though you do pay a return fee)
How do you account for this in the raw excel download you get from generating a report?
Please highlight anywhere i may be going wrong in this assumption
Many thanks!
3 replies
Seller_qZO3ZCjoBXEeL
You have several ways to consider this.
From an accounting standpoint you have gross revenue (sales) and then you have expenses. Your sales for a given period will total £X. Your expenses for the same period will total £Y. From this you work out your profitability, margin etc. At a very broad level, your cost of sales is probably easiest to apportion across your total revenue giving you an average cost of sales for the period in question.
In a different slice or view, you may want to track that on a per-product basis, or a per-channel basis if you sell in more than one place, to ensure each product is a profitable as you expect and each channel performing as expected.
