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dhunt84
Level 1

How do I record payments that i collect from customers then disperse those funds to a third party

I collect payments for various services for a few different clients. I need to invoice my client's customers and have them pay through my company.  At the end of a given period, I  disperse those collected funds ( minus my collection and management fees) to my clients. I need to be able to invoice my clients customers without the collected funds being see as revenue for my company. I deposit all payments into a liability account (client trust account)  until it is time for disbursement. I am unsure as the the correct procedure as to invoice their customers, send them a receipt and it not be listed as income for my company. 

Solved
Best answer April 22, 2020

Best Answers
JenoP
QuickBooks Team

How do I record payments that i collect from customers then disperse those funds to a third party

Hi there, dhunt84.

 

Using a liability account for collecting payments from your customer's clients is diffidently an option to avoid them being counted as part of your income.

 

You can also create a non-inventory or service item that will represent the payment. Then, use the trust account in the Income account field. Here's how:

 

  1. Go to the List menu and select Item List.
  2. Press CTRL + N simultaneously.
  3. Select Non-inventory or Service.
  4. Go to the Account field and select the trust account.
  5. Click OK.

Once done, you can us the item in the invoice when sending them out to your client's customers. 

 

However, we also recommend reaching out to your accountant for further advice to make sure that these type of transactions are recorded properly.

 

The Community is always here if you need anything else. 

View solution in original post

6 Comments
JenoP
QuickBooks Team

How do I record payments that i collect from customers then disperse those funds to a third party

Hi there, dhunt84.

 

Using a liability account for collecting payments from your customer's clients is diffidently an option to avoid them being counted as part of your income.

 

You can also create a non-inventory or service item that will represent the payment. Then, use the trust account in the Income account field. Here's how:

 

  1. Go to the List menu and select Item List.
  2. Press CTRL + N simultaneously.
  3. Select Non-inventory or Service.
  4. Go to the Account field and select the trust account.
  5. Click OK.

Once done, you can us the item in the invoice when sending them out to your client's customers. 

 

However, we also recommend reaching out to your accountant for further advice to make sure that these type of transactions are recorded properly.

 

The Community is always here if you need anything else. 

View solution in original post

dhunt84
Level 1

How do I record payments that i collect from customers then disperse those funds to a third party

thank you. 

RitaM
Level 1

How do I record payments that i collect from customers then disperse those funds to a third party

How to i create the trust account

RitaM
Level 1

How do I record payments that i collect from customers then disperse those funds to a third party

How do i create a trust account 

RitaM
Level 1

How do I record payments that i collect from customers then disperse those funds to a third party

Please help me with a solution too i am using customer deposits. We are a construction company

CharleneMae_F
QuickBooks Team

How do I record payments that i collect from customers then disperse those funds to a third party

I've got you covered, RitaM.

 

Let me first welcome you here in the Community. I'm here to help you create a  trust account in QuickBooks Online.

 

Here's how:

  1. Go to the Accounting menu.
  2. Select Chart of Accounts, then click New.
  3. For Account Type, select Other Current Liabilities.
  4. Select Trust Accounts-Liabilities under Detail Type.
  5. Type in your desired name under Name.
  6. Once done, click on Save.

 

For your visual reference, I've attached some screenshots below.

 

To learn more about creating accounts in QuickBooks, I recommend checking this article: Add an Account to your Chart of Accounts.

 

Additionally, I've added an article that will help in managing and recording bank deposits: Record and Manage Bank Deposits.

 

It's my pleasure to guide you through the process. For other QuickBooks related concerns, I encourage getting back to us. This way, we'll be able to help you out.

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