How to Record Gifts and Samples in the System

The system has no document specifically named gifts or samples, and the most accurate way to record them is the manual stock requisitions; because they move stock and let you choose the account on which the entry is recorded. The steps differ according to the direction of the gift:

Case	The Suitable Document	The Effect
Gifts or samples you give to clients or for marketing	Manual Issue on an expense account	The quantity is deducted from stock at the average cost, and the amount is charged to the expense account.
Gifts or samples you receive free from a supplier	Manual Addition at the value of the goods	The quantity is added to stock at its value, and the offset is recorded in the revenue account you choose.

Before You Start

• Create a suitable account in the Chart of Accounts, such as Gifts and Samples Expense under expenses, and Received Gifts and Samples Revenue under other revenues.
• You need the permission Add Stock Requisition. And to enter the price of an incoming requisition you need the permission Edit Stock Movement Price.
• It isn’t necessary to enable Stock Requisitions in the inventory settings to use manual requisitions.

First: Gifts and Samples You Give

How do I record goods received free from a supplier, Can a zero-price invoice be used for gifts

1. From Stock Requisitions click Add then choose Manual Issue.
2. Choose the warehouse and the date, and you can choose the client who received the gift.
3. In the Sub-Account field choose the Gifts and Samples Expense account.
4. Add the products and the quantities, and write the reason for the issue in the Notes, such as: exhibition samples or a gift for a client.
5. Click Save, and the quantity is deducted immediately and the entry is created.

Example: issuing 10 units with an average cost of 20, so the following entry is created at cost, not at the selling price:

Account	Debit	Credit
Gifts and samples expense	200.00
The main warehouse (the warehouse account)		200.00
Total	200.00	200.00

Second: Gifts and Samples You Receive

1. From Stock Requisitions click Add then choose Manual Addition.
2. Choose the warehouse and the date, and you can choose the supplier who sent the goods.
3. In the Sub-Account field choose the Received Gifts and Samples Revenue account.
4. Add the products and the quantities, and enter the Unit Price at its actual value (such as their usual purchase price).
5. Click Save.

Example: receiving 5 units with a unit value of 30:

Account	Debit	Credit
The main warehouse (the warehouse account)	150.00
Received gifts and samples revenue		150.00
Total	150.00	150.00

Can a Zero-Price Invoice Be Used Instead?

The Alternative	What Happens	When It Isn’t Suitable
A sales invoice at a price of zero or a 100% discount	No revenue is recorded, but a cost of sales entry is recorded at the average cost, and the quantity appears in the sales reports.	If the Selling Below Average Cost setting isn’t allowed, saving is rejected. And the cost is charged to the cost of sales instead of the gifts expense account.
A purchase invoice at a price of zero	The quantity enters stock without an entry and without an effect on the supplier’s balance.	It lowers the product’s average cost like the manual addition at a price of zero.

And if the gift is part of a promotional offer such as Buy One Get One, use Offers so the system applies the free quantity automatically as a discount on the invoice.

Notes

• The manual requisition is created with the status Approved directly, so stock moves and the entry is created as soon as it is saved.
• You can set a default account for manual stock requisitions from Stock Requisitions Account Routing, or from the Default Sub-Account in the inventory settings, and you can still change it in each requisition.
• Review the tax treatment of gifts and samples with your tax advisor; since stock requisitions don’t calculate tax.