Accounting for Groupon Sales

Accounting for Groupon Sales

Didn't find your answer?

Hi,

I have a Limited company client with a modest turnover of which around 25% is business brought in via Groupon. The client is not VAT registered and I wondered if anyone has had experience of accounting for this.

My particular queries are:-

1) I assume that my client has to account from the total voucher value as sales rather than the amount banked which is the voucher value less a whopping 50% + VAT? The Groupon fees are then included as a sales commission or advertising?

2) Groupon provides a monthly invoice to the client detailing redeemed vouchers, fees deducted at 50% + VAT and the amount to be transferred to my clients’ bank account (i.e. 40% of the total sales value).

I assume that some vouchers have been purchased and not yet redeemed. If this is the case do Groupon keep the entire sale until it is redeemed? Do Groupon provide reports regarding this and should this be included in sales with a related cost of sales provision?

Many thanks in advance.

Replies (1)

Please login or register to join the discussion.

avatar
By Carolynne
08th Apr 2013 15:27

Accounting for Groupon Sales

I have dealt with a couple of Groupon Sales for my clients, and another similar type run in the same way.

I can only respond with my own experience, so may not answer all your queries.

 

If Groupon sales total 1,000 plus 200 VAT.  The sale to my client is £!,200

This is entered as a sale in the accounts.  (whether VAT registered or not, this is the figure you have received for sales).

 

if then Groupon send my client £600.  This leaves an expense of £600 to put through the accounts.(whether VAT registered or not this is the figure you have received).

 

Thus leaving the true sale figure of £600 (Gross in this instance of VAT).

In this way, you are reflecting the true sales and then deducting the amount groupon take off.

 

I would assume if not VAT registered.  The gross figure including VAT, becomes the total sales and total expense figure included.  As if you were not vat registered and  bought fuel for example, you would not only claim the net amount back, you would claim the gross amount back in your accounts.

 

Hope this is of some help.

 

Thanks (1)