Gift Card Accounting
We are trying to set-up and use Gift Cards. The issue we are having is that the system is improperly accounting for the transaction per AICPA and FASB rules (Accounting Standard Rules used by CPAs). When the Gift card is purchased, the system tracks the cash/credit card receipt and the drawer counts are correct. However on ALL reports there is no inclusion of the "Sale" of the Gift card. This makes the Drawer Counts not match the revenue reports. Per AICPA rules the "Sale" is counted as Revenue when the card is purchased and in your books you also create the Liability (Outstanding Gift Card Balance).
When you redeem the Gift Card, no money is exchanged, but the system now counts the transaction as revenue. This is incorrect. At the time of the redemption of the gift card the system should acknowledge the reduction of inventory, and the reduction of the Gift Card (Liability reduction). However the sale should have been recognized when the gift card was purchased.
How can we get the system to correctly recognize these transactions without requiring us to manually merge 3 reports from the system on a daily basis?