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Thread: Pastel invoicing

  1. #11
    Site Caretaker Dave A's Avatar
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    OK - I don't understand the problem then.

    You've been invoiced by the supplier, which you will show as an expense in your books, and you've declared output VAT on imported goods based on this value. As you are selling the goods on, you'll also be claiming the VAT you paid to SARS on this invoice as an input VAT deduction in your VAT return in due course. Ultimately the whole deal is VAT neutral to this point.

    The goods are now yours and you are going to sell them to your mate so that it becomes his so that he can sell it on at a profit which you two are going to split.

    So you now invoice your mate {cost + VAT} and invoice him {profit share + VAT} later (or just invoice him {cost + profit share + VAT} now).

    Now when it comes to dealing with the money, having a bank account in your books called Contra is handy in situations like this, but I expect the money flow could be dealt with by a journal entry too. (I know how I'd do it in Quickbooks - I'll leave it to the Pastel gurus to cover the journal if you go that way).

    So you receive payment against your invoice to your mate, and you pay the bill from the off-shore supplier by the amount paid by your mate to the offshore supplier.

    In your mate's books, he will show that payment as being towards your bill to him.

    And hey presto - the only question left is when do you get the rest of your money

  2. Thanks given for this post:

    Martinco (14-Apr-11)

  3. #12
    Gold Member Martinco's Avatar
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    Ok I am going to make a copy of this and take it with me when I get arrested for fiddling the Vat/books and maybe they lock both of us up in adjacent cells ! But thanks anyway..........I shall do it this way.
    Martin Coetzee
    Supplier of Stainless Steel Band and Buckle and various fastening systems. Steel, Plastic, Galvanized, PET and Poly woven.
    We solve your fastening problems.
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    You may never know what results will come from your actions, but if you do nothing, there will be no results... Rudy Malan 05/03/2011

  4. #13
    Site Caretaker Dave A's Avatar
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    Don't worry - if you look closely, SARS is getting their legitimate slice - the VAT on what you're invoicing your mate plus the VAT on his nett markup

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