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Hi I need the step on the following payment recording:
We are General insurance agency, selling Insurer's product (different type of insurance)
*Scenario 1 : We collect payment on behalf of Insurer:
1. issue Invoice under customer : in the invoice product/service should create under which account? the premium collect on behalf of Insurer is not revenue. but we need the premium reflect in the record so that we can keep track how much customer owe us.
2. issue Bill under Insurer : in the bill which Category to select? we need to keep track the premium that we owe insurer.
*Scenario 2 : Customer paid direct to Insurer:
1. what documents and Category I need to issue to make the premium reflect in the AR and AP record?
Thanks for posting here, @Luluwawa,
Since the income isn't part of your books, you can consider it as a liability. You can use these steps to record income collected for a third-party holder.
Step 1: Create a trust liability bank account: (optional)
Step 2: Create a trust liability account:
Step 3: Create a product or service item that uses the trust liability account
When you issue a bill, use the same Trust Account category to post the funds correctly. Regarding the second scenario, using invoices and bills will automatically put the transactions in the A/R and A/P accounts.
However, we still recommend consulting with an accounting professional for this. This way they can advice on how to handle your accounting and help you record credit card interests.
Please update me if you have more questions about recording customer transactions in QBO. I'll be more than happy to help whenever you need me. Have a nice day!
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