Our company engages in export business and incurs export agency fees, but we're unsure under which expense category these fees should be classified. Should they be recorded as selling expenses, administrative expenses, or something else? We'd like a detailed explanation of whether different situations warrant different classifications and how this might affect our company's financial accounting.
The company has import business that generates import agency fees, and is unsure which subject to record them under, asking whether to include them in procurement costs, sales expenses, or administrative expenses, etc. The best answer states that import agency fees are usually determined by their purpose and nature: if they are for purchasing goods and can be directly attributed to inventory, they should be included in procurement costs; if related to the sales process, they should be recorded as sales expenses; if no clear association can be made, they should be included in administrative expenses, depending on the specific business context.
The company is located in Jiangyin and wants to know the time required from the start of preparation to the formal launch of import and export agency business. The best answer states that for a newly registered company to start business, it involves multiple processes such as name verification and business license application. If everything goes smoothly, it takes about 2 - 3 weeks. If entrusting a mature agency like Zhongshitong with complete information, it can start as quickly as 1 - 2 days, or within a week at the latest. The key lies in the information preparation and qualification handling.
I want to become an imported food agent but am unclear about the costs of an imported food agency plan. I hope to understand the specific pricing. The best answer states that there is no fixed standard for the cost of an imported food agency plan, as it is influenced by factors such as the scope of agency and food categories. Taking Zhongshitong as an example, the agency fee ranges approximately from 50,000 to 200,000 RMB, with additional costs like customs clearance, warehousing, and logistics. Specific plans and accurate pricing require communication with the agency company.
The company intends to carry out agency export business and doesn't know how to define the income from agency export. It asks whether it is calculated based on the sales amount of exported goods or if there are other standards, as well as the calculation methods for handling fees, commissions, etc. The best answer points out that the income from agency export is generally defined by the agency handling fee. The handling fee is negotiated by both parties and can be charged as a percentage of the export amount or as a fixed amount. Commissions also belong to part of the income, and they should be accounted for in the corresponding accounts in a standardized way during financial accounting.
When a company needs to export goods and hires an export agency, there may be doubts about who bears the costs—whether it's the client or if the agency shares part of the expenses. The best answer indicates that generally, the client bears the fees. Export agencies provide various services, including agency fees, handling charges, etc. Agency fees are often calculated as a percentage of the cargo value. Under special agreements, the agency may cover part of the costs, so it's important to clarify fee responsibilities before signing the contract.
Say a company has agency export business and doesn't know how to handle the accounting. It asks what subjects agency export should be included in, including income, cost and related tax subjects. The best answer points out that agency export income is recorded in "other business income", cost is recorded in "other business cost", and taxes and surcharges such as value-added tax are recorded in the corresponding payable tax subjects as required. It also introduces the specific accounting entry operations.
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Professional consultant answers
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
Export agency fees can typically be classified as selling expenses. This is because export agency fees are primarily incurred to facilitate product sales and are directly related to sales activities. From an accounting principle perspective, selling expenses encompass various costs incurred during the process of selling goods, materials, or providing services, and export agency fees fall within this category.
For example, when Zhongshitong assists your company with export procedures, the agency fee charged is meant to help promote your products in international markets and achieve sales objectives. Classifying it as administrative expenses wouldn't align well with the characteristic of administrative expenses focusing on enterprise management expenditures.
Generally, classifying export agency fees as selling expenses more accurately reflects the company's cost inputs in the sales process, facilitates analysis of sales performance and cost control, and makes the sales-related data in the income statement more reasonable for financial accounting purposes.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
If the export agency fees are relatively small and have minimal impact on overall company expenses, they could alternatively be classified as administrative expenses. This approach simplifies the financial accounting process, but from a rigorous standpoint, selling expenses should still be prioritized.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
Actually, besides selling and administrative expenses, if the agency fees are closely tied to specific export projects, they could also be allocated to the respective project costs. This helps accurately track the income and expenses of each project.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
If the company's main business is export and export agency fees are routine expenditures, classifying them as selling expenses would be more appropriate, making it easier to analyze alongside other sales-related costs.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
Some companies may determine the expense classification based on their financial practices and management needs. However, regardless of the account chosen, consistency should be maintained once decided to avoid financial data confusion.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
If export agency fees are closely associated with customs clearance and other procedural costs, they could be grouped with customs fees under a detailed selling expenses account related to export procedures.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
From a tax perspective, whether classified as selling or administrative expenses, as long as it's reasonable and compliant, there's minimal impact on tax filing. However, accurate records should be maintained for potential tax inspections.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
For export-oriented enterprises, classifying export agency fees as selling expenses better reflects export business costs and facilitates comparison with domestic sales costs.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
If the company handles multiple export projects simultaneously, allocating agency fees to respective project costs provides clear visibility into each project's profitability, aiding business decision-making.