Shipping Free Samples

If you are sending out free sample products to your customers here's how you can track the shipping of the items and associate the cost against your marketing campaign.

Setting Up

Free samples are shipped using a normal sales order but with a zero price. In order to track the deliveries that included free samples you will need to create a Custom Field on your sales orders.

1. Go to Setup > Custom fields > Sales.
2. Click the Add a field button.
3. Name your field appropriately, e.g. "Free sample?".
4. Select the tab to add the field into or create a new one, e.g. "Sample".
5. Select the Custom field type as Yes/No.
6. Specify whether you want this to be a required field when saving sales orders.
7. Click the Save button.

Ship a Free Sample

To ship a free sample:

1. Create a sales order as normal.
2. Add the product with a zero sale price.
3. Select the Custom fields tab and select Yes for your free sample flag.
4. Save, fulfil and ship the order as normal.

Once the sale is shipped the inventory value is reduced and cost of sales is recorded. You can find out how to associate this cost to a marketing campaign below.

Reporting on Free Samples

Now you can now filter the sales list report by the sample custom field.

1. Go to Sales > List all Sales.
2. Click the Show filter button.
3. Click the Add filter link.
4. Set the filter to Where: "Free sample?" is equal to: "Yes".
5. Click the Filter report button.

This will give you a list of all orders containing free samples. You can now use this report to help work out the total of free samples to move the cost from purchases in your P&L to a marketing expense account.

Record the Cost of a Free Sample Against Marketing

To do this, it is actually the Cost of Goods Sold journal you need to adjust. This is a journal created by Brightpearl when an order is shipped to move the value of the inventory shipped from the stock asset account to purchases on the P&L i.e. the cost of the sale. When an order is invoiced, this is when the revenue is recognized on the P&L (which is zero for samples).

Once you have shipped the order, change the quick search drop down in the top right to Accounting, type the order number and press go. You should see a journal type of JJ against your order. Click on the journal IS on the right to amend the journal. You can now amend the debit line to move the cost to a marketing expense. You can create a new nominal code for Marketing Expenses via Accounting > Chart of Accounts either under Purchases (5xxx), Direct Expenses (6xxx) or Overheads (7xxx).

Amending each journal could become quite an administration task so consider using the report above to find the total of free samples shipped in a given day/week/month to create a manual daily/weekly/monthly journal to move this cost.

Please find more info on Cost of Sales Accounting here