Selling gift cards as a fundraiser?
Here’s how to track those in MoneyMinder.
Best case scenario: You start off the year with no gift cards and at the end of the financial year you have sold all that you bought.
In this case, simply use a category called Gift Cards.
- Record the purchase of the gift cards as an expense in MoneyMinder. Let’s say you purchased them for $95.
- Record the sale of the gift cards as income. Let’s say you sold them for $100.
- The net in this example is $5. That’s your profit.
What happens if you have some left over at the end of the financial year?
Continuing with the previous example, let’s say you have one left over. You paid $95 for it. But it’s worth $100.
- In this case, you have an expense of $95 which isn’t really valid.
- You’ll need to add a Bank Account called Gift Card Bank Account. On the last day of the financial year make a deposit into the Gift Card Bank Account for $95, allocating it to the Gift Card category. This will make your Gift Card category net out to $0, although it will be overstated.
- You will show a balance in the Gift Card Bank Account of $95, which is inventory at cost and is as close as we can get to reality.
What happens the following financial year?
It’s the beginning of the next financial year and you start with a Gift Card Bank Account balance of $95.
If you don’t sell that leftover gift card all year, it stays where it is and gets carried forward yet another year.
Let’s say you do sell it.
- Make sure you sell this before you sell any others.
- When you get the $100 for the sale you will record it as follows:
- Transfer $95 from the Gift Card Bank Account to your real bank account in MoneyMinder.
- Record a deposit for $5 into your real bank account in MoneyMinder, allocating it to the Gift Card category. That puts $100 into your bank account and shows a profit of $5.
You could also show the $5 profit in the year you bought the gift card which makes selling it next year easier to deal with.
In this case, the deposit into the Gift Card bank account at the end of the year is $100 and you will show $5 income for a card you didn’t sell.
When you do sell it, you simply transfer the $100 from the Gift Card Bank Account to your Checking Account.
No category is involved, nor is income. Because you showed it last year.