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How to match a deposit net check with a sales receipt and expense (commission)?

Our company is releasing a book. The publisher is paying the advance to our literary agent, who withholds a commission and then pays us the remainder. 

 

Our accountant is recommending that we track the gross amount paid as income from our publisher, and the commission withheld as an expense to our agent. So for our first advance check, I created a sales receipt for the gross amount, and a separate expense transaction for the agent's commission. I'm not sure how to match those two transactions to the deposit of the check we received for the net amount from our agent. Is there any trick to matching a downloaded bank deposit to both a sales and an expense? Or should I just exclude that check deposit from the data sync, since the information has been entered by other means?

 

 

(Title has been edited by moderator for clarity)

Solved
Best answer 09-14-2017

Accepted Solutions
Established Community Backer ***

Re: Recording a deposit of income with commission withheld

You are describing Barter = instead of you getting the gross and paying the commission, they kept the commission as a holdback. That's because the Agent is your cost and might be subject to 1099 reporting, and your Royalties, etc, will come from your customer on a 1099, in gross.

 

So you set up and use a Bank type of account for Clearing. You "deposit" that sales receipt to this bank and Write the expense check from there. The Real Deposit is a Transfer from Clearing Bank to Real Checking.

 

Clearing Bank should always end at 0; that's how you know you did a Barter correctly.

5 Comments
Established Community Backer ***

Re: Recording a deposit of income with commission withheld

Hi jncasey, 

 

It's always a good idea to double check these processes if you're unsure, so I'm glad you reached out. 

 

QuickBooks Online won't match a deposit to an expense transaction, so excluding the deposit is a good idea in this situation. You can do so by going to Banking, selecting the transaction with the box on its left, going to Batch actions, and choosing Exclude transactions. Since you've already recorded the sales receipt and expense per your accountant, you're good to go from here. 

 

If you have any further questions, please don't hesitate to let me know. 

 

 

Established Community Backer ***

Re: Recording a deposit of income with commission withheld

You are describing Barter = instead of you getting the gross and paying the commission, they kept the commission as a holdback. That's because the Agent is your cost and might be subject to 1099 reporting, and your Royalties, etc, will come from your customer on a 1099, in gross.

 

So you set up and use a Bank type of account for Clearing. You "deposit" that sales receipt to this bank and Write the expense check from there. The Real Deposit is a Transfer from Clearing Bank to Real Checking.

 

Clearing Bank should always end at 0; that's how you know you did a Barter correctly.

Not applicable

Re: Recording a deposit of income with commission withheld

I have a similar situation and followed your advise but if I exclude the transaction when the ach came in to my bank, the cash account in quickbooks will not tie. and the sale will remain open without a payment made against it.  

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Re: Recording a deposit of income with commission withheld

Hi  qbteachmt

 

I have a similar situation. Can you please advice how did you go about it? Thank you very much.

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Re: Recording a deposit of income with commission withheld

sorry, resolved

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