How do I record a payment made on behalf of a Client?

imanB · ‎August 04, 2022

Hello

Our company provide a student Visa services to international students. We have a problem how to add an account to this transactions.

For example: Students wire their tuition fee into our checking account and we will pay tuition fee on behalf them to some university in one or two week later.
I meant since some clients are not able to transfer money from abroad directly for a service in Canada, we get the money they provide to exchange companies and we pay the service fee to Canadian service providers on their behalf.

Since this is not considered our income (just payment behalf of the clients to other institutes), could you help to how to assign this transaction? how to add an account to chart of account? or ....

Please help us.

Leith · ‎August 29, 2022

Hi Iman Here's how I would do it if I were you: 1. Upon receipt of funds, record the deposit into a bank account of the appropriate currency type, and record a liability to the student who provided the money. 2. Record the transfer of funds via exchange to the new currency bank account. 3. Record the payment to the school in Canadian funds, and offset the liability to the student now that you've made the payment on their behalf. Note: on this last step you will encounter and exchange difference which you can choose to record as an expense, or manually enter the exchange rate as provided by your exchange firm so the values tie out to 0. Hope this helps! Leith

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How do I record a payment made on behalf of a Client?

How do I record a payment made on behalf of a Client?

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