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3rd party Pays the sub-contractor

I enter the bill.  The bill is entered under an item and placed on an invoice.  The invoice is sent to the customer.  The customer has their bank directly cut the checks to the bills on the invoice including my profit to me.  Now I have a bunch non payed bills and an invoice with only a partial payment.  I do I clean up my books?  I purchased construction and advanced #2 but the owner needs a loan asap. 

Best answer 11-29-2018

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Established Community Backer ***

Re: 3rd party Pays the sub-contractor

You are describing something like "Bank uses construction loan to pay my subs" or "I got third party checks to sign over to the subs."

 

You treat them the Same. First, you use Receive Payment for the total, and Deposit to a Bank type of account you name Clearing or Barter.

 

Now pay the bills from the Barter Bank.

 

The remaining balance here should be your share. You use Banking menu > Transfer, to checking, for the actual Net you have, that you called your "profit." It is the Net Banking, and not really profit, of course.

 

Now Barter Bank or Clearing Bank should be 0 for this date; that's why it is called Clearing or Barter. It is "We avoided trading all of that banking in reality, and just traded all the Values."

 

Have you discussed with your own CPA if these Subcontractor costs are your revenue and expense; they might be your Work In Process Other Current Asset, instead.

1 Comment
Established Community Backer ***

Re: 3rd party Pays the sub-contractor

You are describing something like "Bank uses construction loan to pay my subs" or "I got third party checks to sign over to the subs."

 

You treat them the Same. First, you use Receive Payment for the total, and Deposit to a Bank type of account you name Clearing or Barter.

 

Now pay the bills from the Barter Bank.

 

The remaining balance here should be your share. You use Banking menu > Transfer, to checking, for the actual Net you have, that you called your "profit." It is the Net Banking, and not really profit, of course.

 

Now Barter Bank or Clearing Bank should be 0 for this date; that's why it is called Clearing or Barter. It is "We avoided trading all of that banking in reality, and just traded all the Values."

 

Have you discussed with your own CPA if these Subcontractor costs are your revenue and expense; they might be your Work In Process Other Current Asset, instead.