In logistics, it is very common to pay and receive money on behalf of third parties. The key is recording it correctly to avoid distorted financials, unrealistic losses, or unnecessary tax payments.
In the logistics industry, receiving or paying money on behalf of third parties is part of daily operations. If these values are not recorded correctly, the system may overstate revenue, show costs that do not belong to the business, or produce unrealistic financial reports.
That is why, when working with customs duties, port charges, or other third-party amounts temporarily handled by your company, it is essential that those transactions affect asset or liability accounts rather than income or cost accounts.
Charge configuration
Magaya allows you to edit the charges commonly used with third-party income and cost accounts. You can even configure the system so these are always treated as third-party charges, reducing the need to remember the setting on every shipment or transaction.
Collect / Prepaid and Third Party Billing
When adding charges, you can use the Collect / Prepaid option to determine whether the charge is third-party or not. When creating an invoice, simply activate Third Party Billing where needed so the system posts the values to the appropriate asset or liability accounts.
Two common scenarios
If your company pays third-party costs on behalf of the customer, those entries should be treated as recoverable assets or receivables. If the customer gives you funds to make those payments, the amounts should go through liability accounts until they are properly applied.
Proper configuration does more than improve accounting. It also reduces manual reporting, repetitive calculations, and unnecessary back-and-forth between operations, accounting, and profit share tracking.
In one real case, using standard Magaya functionality, a report was built in just minutes to replace a manual process that took about 8 hours each month. That single change created immediate time and cost savings.
Although Magaya has limitations when displaying this information directly in reports such as the Balance Sheet, the right setup and personalized reporting can help you identify exactly how much third-party income and cost each shipment or consolidation carries.
If you want to explore the base configuration further, you can review the Magaya Knowledge Base article on configuring accounting in Magaya.
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