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Business question about gift cards / certificates
Posted on 2/7/17 at 3:15 pm
Posted on 2/7/17 at 3:15 pm
We all know that many people like to give gift cards or certificates as birthday or holiday gifts. Typically this is done either online or in store.
When dealing with 1099 contract workers, i.e. hair stylists or groomers that often have a pre-arranged agreement to split a percentage of the sale, is there anything different that needs to be done to ensure proper allocation to correct 1099 worker?
I envision gift card / certificate gets sold, company books it as revenue and when it is used, the portion of gift card / certificate then gets distributed to 1099 worker and store.
Seems simple enough, but am I missing anything here?
When dealing with 1099 contract workers, i.e. hair stylists or groomers that often have a pre-arranged agreement to split a percentage of the sale, is there anything different that needs to be done to ensure proper allocation to correct 1099 worker?
I envision gift card / certificate gets sold, company books it as revenue and when it is used, the portion of gift card / certificate then gets distributed to 1099 worker and store.
Seems simple enough, but am I missing anything here?
1
Posted on 2/7/17 at 4:10 pm to Will Cover
Technically when you sell the card/certificate, it's booked as a deferred revenue/liability account. When it's redeemed, it's moved to revenue, and then when the split occurs, the expense (for contract labor) is recorded and payment made to the contractor.
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