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Today’s Question

The Question:

Hello Seth,

Need your advice –

we are sending out samples to our clients – most of the time free of charge or we bill a flat fee.
when entering these ‘sales’ in QuickBooks – what would be the best practice?

Our vendors in turn send us samples sometimes free of charge or bill us – whenever sample invoices come in we enter them in an cog account that is called ” samples” and “sample freight cost” –

I have temporarily setup a “sample income ‘ account that books to ‘sales’ would that be correct?


Here is the answer:

I would actually post an invoice or a sales receipt for the samples you send out (this way your inventory quantities are properly reduced), but enter a selling price of ‘0’ so there will be nothing due. In other words, when you send out samples, you are essentially selling them for ‘0’.

On other side, when you receive samples, you want to enter it the same way as you would for products you have to pay for (so that inventory Quantities are properly increased) but you will be entering them with a cost of ‘0’ and the items will carry whatever selling price they are set up for. If you have to create the item then of course you will set up the appropriate selling price.

If/when you do pay for samples, then yes I would book directly to cost of goods sold.

If/when you charge for samples (assuming they are not counted in inventory), then yes you can set up an item called “Samples” as a non-inventory part and then map it to the income account called samples. If they are counted in inventory then you invoice them as you would on any sale of products.

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