How to enter sales/revenue in QuickBooks online when deposits include monies that have to be paid out

Forum|Forum|3 years ago
February 4, 2023
4 replies
14 views

Hi,

We receive deposits in our bank account from an ACH processor that include both revenue and monies to be paid out that are collected on behalf of our customers. For example, we receive $1000 deposit in the bank out of which $800 gets paid out as we collected $800 on behalf of the customer. However $200 needs to be recognized as revenue.

What entries need to be made in QuickBooks Online and in which account. Please help!!!!

QuickBooks Online

BUNKER

You will need to setup an liability account for the $800 you owe the customer. Setup the liability account as

> Other Current Liabilities

> Tax form section >Other Current Liabilities

and name the account the customer you owe money too. Then split the $1,000 transaction like this.

$800 to (your new liability account to the customer)

$200 to your income account

Then when you pay the customer $800 from your checking code it to that liability account, that will give you a 0 balance for that account on the balance sheet.

newbie4040Author

Thank you. The challenge is that we don’t know the income amount until the end of the month. For example we collect different amounts daily. But at the end of the amount I am told $2000 is income. How do record it

Rainflurry

Level 11

@newbie4040

Record all of the deposits to the liability account. Then, at month-end, when you know the allocation, create a journal entry: debit (reduce) the liability account for the amount that is income to you and credit income. Then, pay your customers from the liability account.

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