Service Contract Bookkeeping Question

by Donna
(Raleigh, NC)

Service Contract

Service Contract

"How do I record a two-year service contract with monthly payments, especially when it involves labor for services rendered?

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Jan 20, 2024
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starstarstarstarstar 		Recording Service Contracts
by: BB

When dealing with a two-year service contract with monthly payments, you can record it in your books by creating a recurring entry for each monthly payment. If and when services are provided, you can then match the associated labor costs to the revenue generated from the service contract. This ensures a clear and accurate reflection of your expenses and income over the contract period. It's like keeping a tidy financial diary for your business!

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Service Vs Sales Business Classification

Service Vs Sales Business Classification

Service Vs Sales Business Classification

Would you classify a gym as a service or sales business structure?

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Aug 25, 2018
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starstarstarstarstar 		Sales Vs Service Business Classification
by: Stephanie

Thank you for your question about whether your would classify a gym as a swervice or sales business structure.

A gym primarily provides a type of a service membership that can also sell other supplies and products. So typically, a gyms primary classification would be as a service.

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Valuation of Services

by Simon
(Sussex, UK)

When a customer performs duties for School A and pays £100 instead of the usual £250 for an advanced teaching service, should Business A record the sale at £100 or £250 with £150 allocated to the specific expense?

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Jan 20, 2024
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starstarstarstarstar 		Recording Sales with Customer Contributions
by: BB

In this case, Business A should record the sale at the actual amount received, which is £100. The discounted price reflects the agreed-upon value for the service considering the customer's contributions. Allocating £150 to a specific expense might be more appropriate if there are additional costs associated with the customer's duties. It's all about keeping the books accurate and reflective of the real transactions!

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