Free Accounting Software + Tax Returns, BAS, Bookkeeping and Payroll from Free Accounting Pty Ltd

Free Accounting Software Forum - Sub-contract work - income category?

Back to all forums
This is probably a really stupid question, but here goes:

I run a photography studio. Most of our income is from sales direct from the customer. However occasionally we sub-contract to other studios. What category should I put this cash payment in? Is it still sales revenue?

Cheers, Rebecca
There are no stupid questions.

It is still a revenue and you can use the account Sales Revenue. However, you may find it useful to set up a separate account called something like "Sales Revenue - Sub Contract Work" just so that you can see the income separately in the profit and loss.

Setting up different accounts for different types of revenue will help you manage your business. Setting up too many different accounts will just make things confusing. You've got to find the right balance.
Similar to this. I have just taken on a contractor to handle some of my work. How do I classify this expense?
If the worker is a contractor, it is just a regular cash payment. You would want to set up a separate account to keep the expense separate. You should also check that you treat GST correctly and only claim this where the contractor is registered GST and provides a valid tax invoice.

You also need to consider if the worker is genuinely a contractor or are they an employee? If they are an employee you should pay as an employee using a pay slip. The ATO has a lot of information on this.

Post a New Message

You must be logged in to post a message.