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Dealing with Product Donations

If you have made a product donation to a charity, this may be accounted for as follows:

  1. Enter the donation value as a purchase against the charity.

    If you are receiving nothing in return, generally this will be GST-free. If you are receiving something in return, such as advertising or sponsorship, this will generally be subject to GST. The charity should give you a tax invoice or receipt which makes the GST status clear.

  2. Enter an invoice to represent the supply of goods. (You may be invoicing the charity or a third party.)

    Use your normal stock codes and tax codes. The GST status of your invoice is not affected by the GST status of your donation.

  3. If the invoice value exceeds the donation value, and some cash is received, enter the receipt as normal.

    Alternatively, if the donation exceeds the product value, enter the payment as normal.

  4. Use AccountingTransfer Adjustment Wizard to allocate the outstanding purchase to the outstanding invoice.


Important Note: Cadzow are not providers of GST or tax advice. You must consult your professional advisors for information about dealing with these issues in your environment. This article is designed to discuss the process of entering certain types of transactions into a computer system, using real-world examples.

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