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Revenue Recognition and Disclosed Agency

Revenue Recognition and Disclosed Agency

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A client works in TV behind the camera and operates through a company (FRS105).

He has started to use an agency who invoice the end client for the job price (agreed with my client) plus their commission %.

The agency are paid by the end client and then pay my client based on his invoice which shows the agreed job price less the commision amount as a discount so the amount payable is equal to the turnover recorded in Xero. 

Is this correct in terms of recognising turnover for accounts and VAT?




Replies (2)

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By atleastisoundknowledgable...
09th Nov 2021 17:45

Sounds like the agency is acting as a temp recruitment agency, in which case I believe it is correct.

You’re considering the position of having an agent; the sales invoice to the tv co would be in you clients name, paid to the agent, who would then pass a statement and the net cash onto your client.

Thanks (1)
11th Nov 2021 15:16

I would have recorded the job price as turnover, and the commission as a debit to the P&L.

Thanks (1)
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