Groupon Posting
by Angie C
(Oshawa, Ontario)
Bookkeeping for Groupon Sales
I have a client who uses Groupon for her business. I am completely lost on how to post the info into Sage 50 accounting.
I have access to her Groupon account which shows me vouchers purchased but not amounts. I also receive invoice from Groupon. Any help would be appreciated.
Hi Angie,
I've never worked with Sage 50 or Groupon coupons however Seth at NerdEnterprises.com has a YouTube video that walks you through how to book Groupon in QuickBooks. You should be able to adapt what he is saying to Sage50.
Seth's video walks you through the following steps:
1. Setup a revenue account called Groupon Sales in the Chart of Accounts to track this income separately. An item for Groupon Sales also need to be setup as a service type defaulting to the Groupon Sales account.
2. Setup a cost of goods sold account called Groupon Fees in the Chart of Accounts to could track the Groupon Fees expense separately; as well as a service item type of the same name in the item list set to the Groupon Fees account.
3. Setup a discount type item called Groupon Redemption to can track the redemptions as you will not be receiving any cash payment to deposit to the bank. The item defaults to the Sales Discount account in your Chart of Accounts. Seth recommends that you monitor / check that there are not more redemptions than the quantity sold.
4. Setup a customer called Groupon.
5. When you get your Groupon cheque, open the Sales Receipt form (as opposed to an Invoice form) to book the initial sale to your customer called Groupon as non-taxable (out of scope) revenue because you have sold no product at this point. All you have sold is a benefit in the future or stated another way - you have sold a discount that may be redeemed sometime in the future. For example, if you sold 75 Groupon coupons valued at $30 for $15, your initial sale is 75 x $15 = $1,125.00.
Don't close the Sales Receipt form just yet as there is more to book.
5. The Groupon cheque reflects your net proceeds as Groupon will have deducted their fee and remitted the difference. In QuickBooks, record the fees deducted as a second line item in the initial sale.
Now you can save and close the form.
6. Record the Groupon cheque received to the bank through the Bank Deposit function in QuickBooks.
7. A customer comes into the store, purchases merchandise valued at the $30 and pays for
You have two options for booking this sale. Which option you choose will depend on how you choose to reflect the sales tax. Seth recommends you check with CRA for the their opinion on how to book the sales tax. Personally I would choose the second and simpler option.
7A. The first and most complicated option is to book this sale net of sales tax. I think this would be a tough sell to CRA during an audit.
In a new Sales Receipt form record this $30 sale by showing the merchandise purchased with the appropriate sales tax assigned which in Ontario would be HST at 13%.
On the second line of the Sales Receipt form, show the Groupon redemption of $15 MINUS the Groupon fee deducted as a negative amount that is not taxable. I.E. You are booking the NET proceeds you received as non-taxable. For example, let's assume Groupon's fees were 50%. You would then deduct $7.50 as a non taxable sales discount.
On the third line of the Sales Receipt form, select the Groupon redemption item again with a negative $15 PLUS the Groupon fee amount that IS TAXABLE as you need to record the full value of the coupon for $30. The customer is only going to pay a small sales tax amount for their purchase. In our example, you would deduct $22.50 as a taxable sales discount.
The Sales Receipt will show a net amount for the customer to pay that equals the sales tax payable. In our example the customer owes $0.98 in HST.
7B. The simpler option is to reflect the taxes on the whole sale as payable by the customer. I.E. You are ignoring how they pay for the purchase when booking your sales tax.
In a new Sales Receipt form record this $30 sale by showing the merchandise purchased with the appropriate sales tax assigned which in Ontario would be HST at 13%.
On the second line of the Sales Receipt form, show the full value of the Groupon coupon redemption of $30 as a negative amount that is not taxable.
The Sales Receipt will show the sales tax attributed to the sale of $3.90 is payable by the customer. As I stated above, this option would be my preference as you are paying tax on the entire amount of the merchandise sold.
If it was permitted, I would make sure the Groupon coupon/voucher clearly states that the customer is responsible for paying any applicable sales taxes.
You can watch Seth's YouTube video here: https://www.youtube.com/watch?v=_T8ZG7cw_N4
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