You sell products in your market to make income, and classifying that income in the right accounting categories is obviously important! When you create market orders, you'll likely want to create a connected income transaction in the accounting section of Farmbrite to track the funds you bring in. Farmbrite will automatically associate this income with a default accounting category for your Profit and Loss Statement and Tax Summary reports, but you also have the opportunity to customize the category used for a specific product if you need. This will split the transaction and associate each item in the order with the category it's mapped to.
Note: The standard accounting category used for your market order income is Sales of livestock, produce, grains, and other products you raised. If you do not enable the optional feature in this article, market order income (excluding taxes charged) will be added to that category by default when creating accounting income transactions from market order payments. You can override this on an individual order basis if needed.
Customizing Chart of Accounts
While not absolutely required for this feature, if you want to set default accounting categories for your products, you likely want to review your current accounting categories and create any new ones you'll need for your products as a first step. You can find this under the Settings menu. In the example below we have created additional categories for Hot Sauce Sales, Bison sales, and Shipping and Delivery. They are connected to the same parent category and tax line, but will be split into their own line on our Profit and Loss Statement.
Configuration and Setup
To enable the split feature, navigate to Market>Online Store, and check the box to Split Order Transactions by Product. Be sure to save after making that selection.
Now that the feature is enabled, you'll see a new option in your product configuration to choose a specific category to associate it with. In our example below we have associated one of our hot sauce products with the hot sauce category. Going forward, anytime we sell this product in an order, it's income will be associated with that category instead of the default.
You can optionally select a custom category on any of your products. Be aware that any product without a category selected will be assigned to the default Sales of livestock, produce, grains, and other products you raised category. You don't have to make this selection on all of your products, just the ones you want to classify differently from the default.
You can also decide how to categorize your Shipping and Delivery fee as well. This is found under the Online Store settings. If you do not change this, the shipping fee will be associated with the default category as well.
Splitting Market Transactions
Now that you've configured your categories, enabled the setting, and connected the categories to your products, let's take a look at how this is applied when creating orders.
When you create a new order manually, you'll add the products ordered and then apply any shipping fees. If you've received payment, you'll mark it as paid and optionally check the box to "Record net income (minus taxes) in accounting section (If marked as Paid)". If you do, you can then select a default category to use for the accounting transaction. This selection will be used to split and categorize any products that do not have a category selected in their setup. It does not does override the category you selected for an indivdiual product, it fills in the gaps for any product that does not have one selected.
After saving, the accounting transaction is created, with the products assigned to the correct category from their setup, and products without a category assigned to the default. In the example below, note that the hot sauce and ground bison are categorized in their selected categories, while the 5 Alarm chili is assigned the default as it did not have a category selected in the product setup.
The process is very similar for orders that are received through your online shop.
- If paid via credit card, the accounting transaction will automatically be created when the order is processed. The same rules apply; if the product/shipping fee has a category selected it will be used, and if it doesn't, the default will be assigned.
- If your customer selected to pay via check or cash on pickup, you'll follow the same steps outlined above to update the order and record the transaction.
Be aware that regardless of the automatic split that was created, if you ever want to move a product into a different category, you can navigate to the transaction itself and update the assignment.
Let us know if you have any additional questions as you configure and use this feature!