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Invoicing for services plus goods?


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#1 wombats

Posted 11 April 2017 - 05:09 PM

I have a question about invoices and am hoping someone can answer or point me in the right direction.

I have an ABN, am not GST registered (income no where near high enough to require this) and usually invoice for a service at either a fixed per job rate or an hourly rate.

I have a job coming up where I am going to need to buy a few things to complete the job, which will become the property of the client. Can I just add these items at cost to the invoice (so the client pays for them) and then when I do my tax return subtract that amount from my total income for the year?

#2 born.a.girl

Posted 11 April 2017 - 05:35 PM

Yes, the GST inclusive cost of course (you don't even mention the GST on their invoice).


It's fairly typical in business to 'mark up' these items, to account for the time and effort of sourcing them, having to be out of pocket for them etc.

#3 rileys-mum

Posted 11 April 2017 - 08:49 PM

I would be adding 20% to the goods as your mark up.
It has taken you time to find them, purchase them, maintain records ect.

#4 wombats

Posted 11 April 2017 - 09:22 PM

View Postrileys-mum, on 11 April 2017 - 08:49 PM, said:

I would be adding 20% to the goods as your mark up.
It has taken you time to find them, purchase them, maintain records ect.
But how do you take this into account cone tax time? That extra 20% would be income wouldn't it?

#5 Bone Apple Tea

Posted 11 April 2017 - 09:24 PM

View Postwombats, on 11 April 2017 - 09:22 PM, said:

But how do you take this into account cone tax time? That extra 20% would be income wouldn't it?

Yes

#6 born.a.girl

Posted 11 April 2017 - 10:15 PM

View Postwombats, on 11 April 2017 - 09:22 PM, said:

But how do you take this into account cone tax time? That extra 20% would be income wouldn't it?

You don't have to do anything differently from what you normally do.  Income minus expenses.


In this context, the tax man doesn't care where your income's come from (whether it's from your labour, or charging out expenses you've incurred). You then claim the cost of the items as expenses.

#7 wombats

Posted 11 April 2017 - 10:33 PM

Thanks. I guess I was originally thinking I wouldn't need to bother with dealing with expenses when doing tax return.

#8 MrsLexiK

Posted 11 April 2017 - 10:58 PM

We mark up by a lot more then 20%. Occasionally we charge parts with no labour/job attached (normally job details what parts were used).
The money paid out for the parts is an expense which goes under a sub account "supplies" usually. We then receive payment against the invoice. Effectively the cost of the parts will count as a business expense and at the end of the month/year etc will be reflected in a profit and loss.

#9 dwdwdw

Posted 12 April 2017 - 03:26 PM

View Postwombats, on 11 April 2017 - 10:33 PM, said:

Thanks. I guess I was originally thinking I wouldn't need to bother with dealing with expenses when doing tax return.

Woah!   Hold on here.  Dealing with expenses puts money back in your pocket.  

I don't know your situation, but there are often lots of legitimate business expenses that you can claim -  like depreciation, stationery, postage, etc.  Maybe for your situation it's not enough to bother about, but it can really add up.

#10 wombats

Posted 12 April 2017 - 03:43 PM

View Postdwdwdw, on 12 April 2017 - 03:26 PM, said:

Woah!   Hold on here.  Dealing with expenses puts money back in your pocket.  

I don't know your situation, but there are often lots of legitimate business expenses that you can claim -  like depreciation, stationery, postage, etc.  Maybe for your situation it's not enough to bother about, but it can really add up.

Yes, in my situation there really isn't enough to bother about. No stationery, no postage, essentially just my time and use of a computer (which is used for personal use 90% of the time).




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