How do you pay commission - cash with receipt, no receipt or check?

[nam]

 

How do you pay the commission to your locations that are not charity?  I know from experience they like being paid in cash.  They also don't like signing receipts and I don't like waiting to speak with the owner to have them sign receipt for the cash.  Problem is not having a receipt , should we be audited?  What do you do for proof that you've paid this commission to the store owner if you paid him in cash. 

It is possible to do your taxes and claim almost anything and even get away with it if things aren't too out of line to get flagged for possible review and audit.  The issue isn't in doing your taxes and showing this as cost of good sold but has anyone ever been audited by the IRS in the bulk candy business?  Did they not require proof by showing signed receipts for the cash paid to the locations? 

I've had to get someone new to do my taxes since I've moved out here.  They are really rough on me about receipts and proof for everything.  Bascially, saying that if audited the IRS will want receipts or no deductions.  We can do the taxes but without receipts should we be audited then it would be a problem. 

nam

[pdavid]

I've never had any issues getting them to sign the receipt. They sign every time for me.

[dperry]

I've never had a signed receipt. However if you create your own receipts showing the Location, Date and Amount, that should be good, right? Another option is to write up a statement for the year and have the owner sign that one reciept if you wish.

[nepavend]

I have always given cash or coin with no receipts to the owner, they seem to like having some spare change they did no work to get.

As far as the IRS and reporting goes, I have all data on my collection sheets along with what I paid them.  I also have all gross sales in Vend-Trak.  I believe that in a lot of cases it would fall into the under $25 category, which means that a detailed written record would suffice, even if you are audited. 

The most important thing is to keep records, the more detail you show the better your chances of reducing the chance of an audit.  The chance of an IRS audit is already very small, but keeping good records is a good habit to have to know where you stand in your business, so you should already be doing it anyway.

Commissions to businesses is not cost of goods, it is a business expense unto itself.  Cost of product is only inventory cost, less what you have on hand at end of the tax year.

[vendingdelaltiplano]

By the moment I´m paying to my four locators 25 % of commission. I pay them with the same coins I get of the machines. What I only give them is a little sheet with the total income of the month for each machine, and the percentage they get. I hadn´t thought in the posibility of being audited. But, even if I don´t have signed receipts, I have all my incomes and financial expanses in an Excel book. 

What I´ve seen is that here in Mexico the vending business is now regulated by the authority. What I only did was to be registred in Secretaría de Hacienda to make business. I pay a little quantity each two months. But I know that some people that have machines, are not registred in Hacienda.  

[lurtsman]

When I spoke to the pizza place they said they did not have a preference. I opted to write checks so that I wouldn't have to deal with getting a receipt.

[BluePlate]

technically,  they are responsible for reporting their earnings. The only exception would be if you pay them over $600 in a year, then you really should file a 1099.

[timberframe50]

I always pay with a check, so problems so far. I started this because one of my location asked for a receipt, I didn't have any, but had a check.

[vendingdelaltiplano]

By the moment I think I´ll continue paying with cash. But after reading these posts, I believe it will be necessary to design and print my own reciepts.