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alan17
Level 2

What is the best way to handle fixed direct debit payments to a supplier? I pay a fixed sum every month to my electricity provider, rather than pay a specific bill.

 
Solved
Best answer September 03, 2019

Accepted Solutions
John C
QuickBooks Team

What is the best way to handle fixed direct debit payments to a supplier? I pay a fixed sum every month to my electricity provider, rather than pay a specific bill.

Hi alan17

 

The best course of action would create a chart of account > Accounting > Chart of Accounts > New > Account type should be cash at bank and in hand > Detail Type should be Current In the Name call it Energy for example.


From the banking screen, where the direct debits are populating/or create manual expenses, in the category enter/select the bank account you have just created above> No VAT.
Then Create the bill you actually received from your utility company. Create icon > under suppliers select Bill > in the category column enter the utility expense account, enter all the other information including the actual amount of the bill and 20% S (20%) the date of the bill should be when you want to account for the VAT (if using accrual method of accounting), this should now reflect the actual bill, select the opaque save > make payment > in the Bank/Credit account select/enter the Energy chart of account you created earlier/above in the payment date enter the date you want to account for the VAT (if you are using the cash method of accounting) >Save and Close.​

 

 

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7 REPLIES 7
John C
QuickBooks Team

What is the best way to handle fixed direct debit payments to a supplier? I pay a fixed sum every month to my electricity provider, rather than pay a specific bill.


Hi alan17

 

Does your electricity provider send you an invoice at any point with the actual amount used and the tax you have to pay on that amount?

alan17
Level 2

What is the best way to handle fixed direct debit payments to a supplier? I pay a fixed sum every month to my electricity provider, rather than pay a specific bill.

Hi John C,

Yes they do; every three months so quite often my monthly payments are running way ahead.

John C
QuickBooks Team

What is the best way to handle fixed direct debit payments to a supplier? I pay a fixed sum every month to my electricity provider, rather than pay a specific bill.

Hi alan17

 

The best course of action would create a chart of account > Accounting > Chart of Accounts > New > Account type should be cash at bank and in hand > Detail Type should be Current In the Name call it Energy for example.


From the banking screen, where the direct debits are populating/or create manual expenses, in the category enter/select the bank account you have just created above> No VAT.
Then Create the bill you actually received from your utility company. Create icon > under suppliers select Bill > in the category column enter the utility expense account, enter all the other information including the actual amount of the bill and 20% S (20%) the date of the bill should be when you want to account for the VAT (if using accrual method of accounting), this should now reflect the actual bill, select the opaque save > make payment > in the Bank/Credit account select/enter the Energy chart of account you created earlier/above in the payment date enter the date you want to account for the VAT (if you are using the cash method of accounting) >Save and Close.​

 

 

alan17
Level 2

What is the best way to handle fixed direct debit payments to a supplier? I pay a fixed sum every month to my electricity provider, rather than pay a specific bill.

Hello John C,

Thankyou for your detailed instructions. I was thinking it would be something along these lines but thought I should double-check in case there was another way of doing it.

All the best.

allportrecycling
Level 2

What is the best way to handle fixed direct debit payments to a supplier? I pay a fixed sum every month to my electricity provider, rather than pay a specific bill.

Hi John

 

I have the same with my electricity supplier. 

 

I have managed to create the "Energy" charge of account, but I'm just lost on the rest!

 

Do you know of any tutorials that shows how to do the rest please?

 

Thank you in advance

EmmaM
QuickBooks Team

What is the best way to handle fixed direct debit payments to a supplier? I pay a fixed sum every month to my electricity provider, rather than pay a specific bill.

Hi Allportrecycling, we do not have a tutorial for this specific scenario however any questions just ask here in the Community and we can certainly guide you through the process in more detail:smiling_face_with_smiling_eyes:

allportrecycling
Level 2

What is the best way to handle fixed direct debit payments to a supplier? I pay a fixed sum every month to my electricity provider, rather than pay a specific bill.

Hi Emma - thanks for your reply.  So basically we're opening a new bank account named Energy then paying our bills from that account as opposed to our current account? That's so clever! (I have no accounting background and am new to Quickbooks!!).

 

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