I receive payments from customers for services and then directly pay the vendors the amount deposited to my bank account. I don't want it to be an income deposit How do I handle these transactions?

I can guide you in handling your payment transactions in QuickBooks Online, @danalavin.

A billable expense is something that you incur on behalf of your customer when you do work for them. You can simply record and manage billable charges so that when your customer receives their invoice, they may refund you.

First, turn on billable expense tracking to record billable expenses. Here's how:

1. Open Settings , then click on Account and settings.
2. Open the Expenses tab.
3. In the Bills and expenses field, click on Edit ✎.
4. Turn on these:

• Show Items table on expense and purchase forms
• Track expenses and items by the customer.
• Make expenses and items billable.

1. (Optional) Set up the following:

• Markup rate
• Billable expense tracking
• Sales tax charge

1. Bill payment terms.
2. Click on Save.

After that, you can bill the customer by entering a billable expense:

1. Click on + New.
2. Choose the transaction (Bill, Expense, or Check) you like to create.
3. Choose the payee.
4. From the Category column, choose the expense account for transaction.
5. Fill in the details and amount of the expense, then choose the Billable checkbox.
6. From the Customer column, choose the customer you want to bill for this expense.
7. (Optional) Fill in or ensure the markup % is correct, then choose the Tax checkbox or select a tax agency if you want to charge tax.
8. Hit Save and close.

Lastly, link the billable expense to your customer's invoice to reimburse the cost:

1. Click on + New.
2. Choose Invoice.
3. From the Customer ▼ dropdown, choose the customer you created a billable expense for. This opens the Add to invoice window.
4. Click on Add on the billable expense you want to charge to your customer.
5. Once done, tap Save and close.

I'm also adding this guide to learn more on how you can handle invoices in QuickBooks: Customize invoices, estimates, and sales receipts in QuickBooks Online.

We're always here to back you up if you need extra help with this matter or QuickBooks in general. Just leave your comment below. Take the best care!

Hi Mich,

Thanks for the quick response.  To be clear I am accepting a payment for services which I then reimburse the vendor.  I don't want to accept these payments as income.

We have a Volleyball club with coaches.  We use a sign up program website that handles all the registration payments for us.  We have multiple teams and players register on that website for specific teams.  Those monies are deposited into our bank account.  We have one coach that is in charge of a certain team and he uses our system to accept registrations.

Once players on his team register on the website the money is deposited in to our account and we then pay him the amount we received.

So I'm not dealing with an expense issue, I'm dealing with an income issue.  Even though the money is deposited in the bank, it's not our income because we turn around and pay the coach for his team registrations we received on his behalf.  Does that help explain my situation better?