Accounting for expenses in online trading

We continue our series of articles on online trading and accounting features. In this article, we will talk about accounting for shipping costs, advertising, and learn what to do with damaged goods, because such troubles happen not only in offline trading.

Accounting for delivery costs

Today it is difficult to imagine an online store without delivery. Shipping costs fall into different categories, depending on where the goods are delivered:
1. Goods arrive at your warehouse from a supplier - in this case, the costs are included in transportation and procurement costs. In accounting for them:

• are included in the initial cost of the goods;      
• keep their records separately, writing off delivery costs in proportion to the total cost of the goods at the end of the month.

2. The goods are shipped to the buyer - in this case, the costs are included in selling expenses. If the buyer pays for the delivery separately, then this service is recorded as a separate item.
3. If the goods are returned, for example, because the buyer refused to pick them up, then the shipping costs are written off as selling expenses.

If the delivery is made by a hired driver of a sole proprietor of the general system, the costs of the driver's salary, fuel, truck depreciation, or car rental are also included in the expenses.

Placement on marketplaces

If you use various marketplaces to promote your products (read more about "How to sell on marketplaces"), for example, Prom.ua, Rozetka, Olx, and others, then the costs associated with promotion should be attributed to sales expenses.
 
These companies use electronic document management, so be prepared for the fact that you will not see the certificates of completion in paper form.
 
Individual entrepreneurs on the general taxation system can deduct such expenses.

Other expenses

Selling and distribution expenses also include warehouse and point-of-delivery rent, telephone and packaging costs. They are expensed in the period in which they are incurred.
 
However, a sole proprietor on the general taxation system cannot deduct such expenses.

Accounting for damaged goods

If the guilty party is found, the cost of such goods is deducted from them, and if there is no guilty party, the cost of the damaged goods is charged to the company's expenses.
 
If a sole proprietor on the general taxation system has damaged goods, he cannot include the cost of the damaged goods in his expenses, but the cost of these goods will not be recorded in his income either.
 
In the next article, we will talk about sales accounting in online trading.