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Experienced Member

Recording a customer prepayment

Our company "sells" invoices to a management company.  The management company keeps 3% as fees and 10% in "reserve" against any invoices that we may not receive payment.  The balance gets deposited into our bank account.  I understand this as a "liability" when we receive the deposit but how to account for the 10% (some kind of Current Asset?) and then the 3% fee (Expense).  Plus then record the invoice as paid when they ACTUALLY pay the invoice to the management company.


I use QB Desktop 2019  Thank you for any help!

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Re: Recording a customer prepayment

Unless you have to return the full amount paid in the event there is zero collected on an invoice by the management company, what you are paid is income at that time


create an asset account called something like due-in-[management company name]


use receive payments, select the invoice and enter the full amount of the invoice
on the next lines of the deposit window
select the fee expense account and enter the amount as a negative number
select the due-in[name] account and enter that amount as a negative number
save and deposit