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christinaleeml-g
Level 1

How do I record a commission received on behalf of a broker and to be paid to them after a project end?

What are the steps involved for recording a commission received on behalf of a broker and to be paid to them after a project ends?
2 Comments 2
ChristieAnn
QuickBooks Team

How do I record a commission received on behalf of a broker and to be paid to them after a project end?

Welcome to the QuickBooks Community, christinaleeml-g. My priority is to provide you with information about recording a commission and transferring it to the broker. With this, please allow me to share details on how you can enter them in our program by following the steps outlined below.

 

To start with, QuickBooks Online currently does not have the option to directly record a commission and use them when a project is done to a broker. 

 

Meanwhile, I recommend depositing the amount of commission to a Trust account. This way, you'll be able to keep the money in the bank and use a specific Income account. To ensure your records are in shipshape, I suggest consulting an accountant before performing the process. They can provide suggestions on how to properly handle the entry, especially with the category to use.

 

If you haven't created an account, you can follow the steps on how to create a new one.

 

  1. Go to the Gear icon ⚙ and select Chart of Accounts.
  2. Click New to create a new account.
  3. From, the Account Type dropdown arrow, choose an account type.
  4. In the Detail Type dropdown list, select the detail type that best fits the transactions you want to track. 
  5. Give your new account a name like Trust account. Then, add a description.
  6. Fill in the other nessadary field.
  7. Click Save and Close when you're done.

 

Once done, you can start depositing the commission. Then open this article for directions on how to complete the processes: Record and make bank deposits in QuickBooks Online.

 

After that, you'll have to create cheques once you already paid the broker. This is to track all the money out and make sure to use the Trust account you've created. Please follow these steps:

 

 

  1. Click the + New button.
  2. Choose Cheque. Then, select the Payee from the dropdown list.
  3. From the Bank account dropdown arrow, choose the Trust account the cheque withdraws money from.
  4. Complete the cheque fields you need.
  5. Click Save and close.

 

Lastly, you may refer to this article to view details on how to run a specific report to reflect all payments made to suppliers or expenses: Run a report with supplier totals.

 

I'm only a post away if you still have other concerns about recording commission in QBO. I'm always here to keep helping. Wishing you a wonderful rest of the week, christinaleeml-g.

christinaleeml-g
Level 1

How do I record a commission received on behalf of a broker and to be paid to them after a project end?

Thanks for your reply.

 

May I know do i need to record an accrual journal entry for the payment i am going to make when i pay the broker?