Each line item in a package or on an invoice can be assigned to an income category in Dubsado. This allows the chart of accounts to automatically add up your income in each category as clients make payments on your invoices.
Creating Income Categories
The chart of accounts is the best place to create and manage income categories.
Go to Reporting >> Chart of Accounts.
Click the Income Category + button.
Enter a Name for the category.
Choose a Type.
Income categories can also be created while you are setting up a line item in a package or on an invoice. Just click New Category.
Income Category Types
When creating income categories, you'll need to choose between Sales, Service, and Non-Operating as the income type. We aren't tax pros, so we encourage you to consult your accountant, but here are some basic definitions of the income types:
Sales - Tangible objects you are selling. Albums, products, anything you would hold in your hand. Could extend to digital products depending on the situation.
Service - Work you perform for your clients, instead of selling a product. Examples include consulting, web design, photography, social media management, or branding.
Non-Operating - Income you generate outside of the primary activity of your business, such as gains on investments or the sale of assets. For example, a photographer's primary business activity is providing photography services and selling prints. However, the photographer might sell one of their cameras (a business asset) and the income from the sale would be typed as Non-Operating and manually recorded on the Reporting >> Transactions page.
Assigning Income Categories to Line Items
For Dubsado to track how much income you make in each category, you must assign an income category to each line item. Then when a client makes a payment on an invoice, Dubsado will automatically distribute their payment across the categories according to the line item totals. You can see this distribution on the Reporting >> Chart of Accounts page.
To assign an income category to a line item, click Select a category in the Category field and select the appropriate category.
👋 Here's a tip... although you can assign income categories to line items while creating an invoice, setting categories on your line items while creating package templates will save more time! This way the category is already assigned when you add the package to the invoice.
Can I set more than one income category on a line item?
No. Each line item may only be assigned to one income category. If you need to split the cost between two categories, you'll need two separate line items.
What if I don't use income categories?
It's ultimately up to you! However, if you do not use income categories and later decide to start using them, all of your income up to that point would be in the Uncategorized income category. If you did want to categorize past income, it would need to be done manually for each individual transaction.
What happens if I delete an income category?
Deleting an income category will move all of the income in that category to Uncategorized. Recategorizing that income would need to be done manually for each individual transaction.