What accounting subject should import and export agency fees be included in?

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Our company has recently been involved in import and export business and has incurred import and export agency fees. We have not handled such expenses before and are unsure which accounting subject to use for these fees. We would like to ask professionals which accounting subject is more appropriate for this expense? Should it be sales expenses, administrative expenses, or other subjects? We hope for a detailed explanation. Thank you.
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Import and export agency fees are generally included in different subjects based on their purpose and nature. If the agency fee is primarily to promote sales activities, such as helping the company obtain export orders, and is directly related to sales, it is usually included in sales expenses. A sub-account for "Import and Export Agency Fees" can be set up under sales expenses for accounting purposes, which clearly reflects this expenditure incurred due to sales activities.

If the agency fee is more related to the company's daily management, such as handling various procedures for import and export, and is not directly linked to sales, it can be included in administrative expenses, also with a sub-account for convenient management.

If the import and export agency fee is incurred for a specific project, and the cost of that project can be clearly accounted for, it can also be included in the relevant project cost. The specific classification should be determined based on the company's actual business situation.

References: Garment Export Agency: Do You Truly Understand It?

If the import and export business is related to the main business, then the agency fee can be considered part of the main business cost, which more accurately reflects the cost of the business.

If the agency fee is incurred for imported goods and is directly related to the procurement of goods, it is better to include it in the procurement cost and transfer it along with the cost of goods.

If the agency fee is not large and has a minor impact on the financial statements, it can be included in administrative expenses to simplify accounting.

If the import and export agency fee is incurred for matters related to export tax rebates, it can be included in non-operating expenses, but this depends on the specific circumstances.

If the agency fee is closely linked to a sales contract and is incurred to facilitate the achievement of the sales contract, it is more appropriate to place it under sales expenses.

From a management perspective, uniformly including import and export agency fees in administrative expenses also facilitates financial statistics and analysis.

If the company accounts for profits by project, it is more reasonable to include import and export agency fees related to the project in the project cost.

If the agency fee is incurred to maintain long-term import and export business cooperation, including it in sales expenses may be more appropriate.

User-submitted questions and answers reflect personal opinions, not the official stance of this website.

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