Just to let you know, beeswax isn’t really the best choice for businesses that make or sell widgets. It’s not really suited for businesses that need to keep track of their stock or make products. There are all sorts of systems that are designed for those things, and beeswax just doesn’t fit the bill.
Beeswax has been meticulously crafted for businesses that primarily offer services billed on an hourly or daily basis. While these businesses may have physical assets or resources, such as recording studios or specialised equipment like lighting, these are generally associated with the primary activity of the business and are merely adjuncts to delivering those services.
Products and Services are essentially the services that are either purchased or sold in order to complete a project or job.
For instance, you may have different rates for different types of services you offer, or you may have a different rate for senior staff versus junior staff.
Additionally, since you may also purchase some or all of the services you sell, such as when you engage a freelancer or contractor, items also have a buy amount. Of course, these amounts can be changed if needed when preparing a quote, invoice, or expense. However, while the amounts can and will change, generally speaking the tax and account allocation for those items, should not. This is to ensure that the tax and account allocation is done correctly by users who may not know what the correct tax or account should be.
Essentially the principle is that someone with the knowledge of accounting and tax sets up the products and services for the business. And once done those products and services can be used by anyone in the busssines who is preparing quotes, invoice or expenses without the need to worry about the correct account or tax allocation.
When preparing a Quote or Invoice, you’re typically doing so to generate income. You expect to receive payment for the products and services you’re quoting or invoicing. Therefore, it makes sense to use the Sell amount to populate a Line Item when selecting a Product or Service during the quoting or invoicing process.
When preparing an expense, the Buy amount is used. While you can override this amount, it provides standard amounts you expect to charge or pay for a particular service or product.
Let me give you another example. Imagine a creative agency that charges different rates for different skills or disciplines. For instance, they might charge more for concept development than graphic design, or they might have different levels of designers, each with their own rate. In each case, a different product or service would be created.
Your business’s nature and structure determine your rates. This is so that Producers and Managers, responsible for preparing Quotes, Invoices and Expenses, can use them without referring to another spreadsheet or table.
Just a friendly reminder that products and services don’t always have to be time-based. They can also be physical items you buy or sell, such as photographic cardboard rolls for a studio. Since this isn’t a time-based product, we’d use the Unit type here. Feel free to use them however you like, but remember that if you want to track time against a product or service, you’ll need to use the hourly or daily type.
Good luck if you can find clients willing to go down the time and materials path. It’s a tough one. Clients expect a result for a specific budget, making it harder for companies to provide services solely based on this approach. However, it still exists, likely a mix of fixed-price projects and smaller “time and materials” projects, possibly with a limit or cap.
If you haven't heard of the term “Time and Materials“. It refers to these two things that products and services represent:
So, these physical things might seem like regular products or widgets, but here’s the thing: they’re usually bought because a project needs them, not because you’re in the business of selling them. That means you don’t have to worry about managing inventory. All you need to do is keep track of how much these things cost you and how much you want to charge for them.
If you’re looking for a freelance photographer, here’s a tip: they’ll usually charge for their time, either as an hourly rate or a daily fee. However, they might also charge for any equipment they need for the job, which could be something specific to the shoot that they don’t already have. In that case, they’ll likely rent it. They might also need some disposable items, like cardboard for a backdrop. These are only used for this specific shoot and wouldn’t make sense for the photographer to own every possible colour they might need. Plus, storing all that stuff would be a hassle. And most of these items will be thrown away at the end of the shoot, which is why they’re called disposables.
Just a heads up, the equipment you rent and the backdrop you buy will be charged back to you. And usually, there’s a little markup on top of that. So, you’ll see a Buy Amount and a Sell Amount for each item. It’s all up to you how much you charge, but it usually depends on how much the equipment or backdrop costs.
