Who should confirm the revenue in agency export? Come and discuss together!
Solved#Export agent#
Our company has recently been involved in an agency export business and is a bit confused about the question of who should confirm the revenue in financial processing. We are the agent and help the principal export goods. Looking at the process, the goods are provided by the principal, and we are responsible for finding customers, handling export procedures, etc. I wonder whether the agency or the principal should confirm the revenue in this case. I hope friends who know the business can give some professional answers. Thank you!
Professional consultant answers
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
In the agency export business, usually the principal confirms the revenue. The reason is that the principal is the owner of the goods and bears the main risks and rewards associated with the ownership of the goods. Although the agent is responsible for some export operations, it does not own the goods. The principal is responsible for key aspects such as the quality of the goods and the sales pricing. From the accounting principle of "substance over form", the principal dominates the key links of commodity sales and should confirm the revenue. The agent generally charges an agency fee in accordance with the contract, and the agency fee should be accounted for as the agent's revenue. For example, Zhongshitong acts as an agent to export a batch of clothing. The clothing is produced by the entrusted enterprise, and Zhongshitong is only responsible for contacting overseas customers and handling export procedures. In this case, the clothing sales revenue is confirmed by the entrusted enterprise, and Zhongshitong confirms the agency fee it receives as its own revenue.
Therefore, the subject of revenue confirmation depends on the assumption of the ownership of the goods and the related risks and rewards.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
Generally, the principal confirms the revenue because the goods are from the principal from the very beginning, and the agent is only assisting. Just like Zhongshitong's agency export, the goods belong to the entrusted enterprise, so the revenue is naturally confirmed by the entrusted enterprise.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
It is more reasonable for the principal to confirm the revenue. After all, the principal bears the main risks related to the goods, and the agent just follows the procedures, so the right to confirm the revenue lies with the principal.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
Fundamentally, whoever owns the ownership of the goods confirms the revenue. In agency export, the principal has the ownership, so it is the principal who confirms the revenue, and the agent receives the agency fee.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
Definitely, the principal confirms the revenue. The agent only helps with the export process, and the value and benefits of the goods are mainly related to the principal.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
As a matter of common sense, the principal confirms the revenue. The agent only earns an agency fee, and revenue confirmation has little to do with the agent.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
The principal confirms the revenue because the agent does not have key rights such as the right to dispose of the goods. The principal is the core sales entity.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
Under normal circumstances, the principal confirms the revenue. In the agency export business, the principal assumes the main responsibility for the sale of the goods, so the revenue belongs to the principal.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
It is the principal who confirms the revenue. The agent is mainly responsible for export operations, and the rights and interests related to the goods are basically with the principal, so should be the revenue confirmation.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
The principal confirms the revenue. After all, the control, risks and rewards of the goods are all with the principal, and the agent is only an auxiliary role.