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How to invoice people from whom we collect on behalf of thirds parties in order for the resulting AR not to be part of our own AR, since these funds are not our revenue?

These invoices are simply a request for funds which we later forward to the parties that hire us to collect.  In essence, these invoices should create a type of "deposits receivable".  I would need a separate sub ledger for deposits receivable for each of our clients
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QuickBooks Team

Re: How to invoice people from whom we collect on behalf of thirds parties in order for the resul...

Hello,

 

This is an interesting question and I suggest you connect with your accountant to get the most accurate answer for your business needs. With QuickBooks Online, you can give your accountant access to your account in a few easy steps. To do so, check this community article on how to manage an accountant user in QuickBooks Online. If you don't have an accountant, you can find a certified ProAdvisor in your area through this link: https://quickbooks.intuit.com/ca/find-an-accountant/.

 

Let me know if you have any other questions.

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Re: How to invoice people from whom we collect on behalf of thirds parties in order for the resulting AR not to be part of our own AR, since these funds are not our revenue?

These are my suggestions as to how to do this.  There are more ways to do this, but for what you have described I think this method would give you what you're looking for.

 

Create a list of parent customers who you collect on behalf of.  Create sub-customers under the appropriate parent customers; the names of people/companies who you are actually collecting the money from.

 

Create an invoice for the sub-customer (which is automatically listed under it's parent).  Create a Product/Service called 'Deposits Payable' or whatever you want to call it.  Make it a Service type item.  Put in the Description you want to show on the invoices.  Under Income Account, put in a Current Liability account called 'Deposits Payable' or whatever you want to call it. Save and close.

 

You have now created an invoice to the place you want to bill, but instead of going to an income account (because, as you said, it is not your sale), it is going to a liability account and will show up on your balance sheet as a liability, until such time as you reduce the liability by paying your parent customer.  Yes, it is still a receivable as well, but it has reduced your overall receivables while increasing your liabilites.  When you pay your parent customer, of course the opposite will occur; receivable is increased and liability is decreased.

 

Create a custom transaction report.  Filter by the Deposits Payable account, and choose customer names, and total by customer.  Memorize the report for future use.  This report will let you know at all times how much is owing to your parent customer, but will also show the breakdown of any sub-customers underneath them.