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Level 1

Deposit to bank account that needs to be paid to vendor

I need to record transactions that are deposited into my account and then need to take 20% of that amount for my services rendered and pay the rest to the vendor.  How would I record that transaction from an inbound cash side?

 

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Best answer February 26, 2020

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Community Champion

Deposit to bank account that needs to be paid to vendor

You have two transactions and you have to account for full deposit into your account first. You cannot create a net deposit that also has expenditure of 80% out and 20% retained and still show the money being deposited.

 

Handle the deposit first. Is it income? Is it a passthrough? A passthrough account wouldl be a current liability when deposited. Then you can record a check that is set up the following. line 1 is 100% of collected funds owed and line 2 is a negative 20% of line 1. Line 2 will be an income account. End result you collect 100% of money on behalf of someone else and have recorded 20% of it as your fee for handling.

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Community Champion

Deposit to bank account that needs to be paid to vendor

You have two transactions and you have to account for full deposit into your account first. You cannot create a net deposit that also has expenditure of 80% out and 20% retained and still show the money being deposited.

 

Handle the deposit first. Is it income? Is it a passthrough? A passthrough account wouldl be a current liability when deposited. Then you can record a check that is set up the following. line 1 is 100% of collected funds owed and line 2 is a negative 20% of line 1. Line 2 will be an income account. End result you collect 100% of money on behalf of someone else and have recorded 20% of it as your fee for handling.

View solution in original post

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