Hello, I have a client who is going to use a re-seller to sell their software into a particular market.
The re-seller will invoice the buyer for the full cost of the software (or whatever they wish to charge for it), and then what my client would like to do is invoice the re-seller for the full price also, and have the reseller invoice my client for the price less the margin.
e.g. say the price to the buyer is £100.
The re-seller would invoice the buyer £100, then my client would invoice the re-seller £100, and the re-seller would invoice my client (say) £70.
The reason my client wants to do this is so they can show a higher turnover whilst still getting the gross profit correct.
I feel uncomfortable with this as I think my client has the right to the lower level of revenue, not the higher level less the cost, but I can't quite get clear on whether I am right to be uncomfortable, or just worried over a nothing. I have had a look at FRS102, but I can't see that particular scenario...
Does anyone with better technical knowledge have a view on this? I realise I may have missed something right under my nose, so apologies in advance if I am being particularly thick!
Thank you
Jennifer
