FormerMember

Entering donated goods into Sage

Posted By FormerMember

My aromatherapy company donated a large number of products to a registered charity.  I know the quantity and items but not the COGS.  Where do I enter the list of donations so they'll be taken out of inventory and coded as a donation expense?

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    Unknown said:
    Where do I enter the list of donations so they'll be taken out of inventory and coded as a donation expense?

    You can record a sales invoice to the registered charity, listing all the items at their regular selling price, then taking off a dollar amount for the donation + applicable sales tax, coding that line to the G/L account for Donations or Promotions.  

    Roughly:

     - If the registered charity is giving you a donation receipt, it's a donation. 

     - If all you are getting back is the goodwill publicity and the thanks of a grateful organization, it's a 'promotion'.

    You can't receive a donation receipt unless you record the sale, or provide the supplier invoice to the charity (and don't record it on your books except as a donation).  

    There is also the more expedient but incorrect method of writing off the inventory as lost / damaged / unsalable and disposed of, but although no cash is changing hands, you may be required to record Sales Tax on the value if it's going to an end user, and that's probably best done through a Sales Invoice.

    All that said, I'm only discussing you the mechanics of making the entry, not on the correct accounting or tax treatment of the transaction.