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Experienced Member

Setting up and billing for payment for independent contractors

I'm setting up a new business with independent contractors (IC) and clients. The ICs (not employees) perform work for my clients and submit weekly timesheets to me. I bill my clients at the end of the month.

 

I pay my ICs out of my business checking account (not through QB).

 

I'm not sure how to set up accounts (names, info) to match the client invoices with payments made to the ICs. Any advice would be appreciated.

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Best answer 01-09-2018

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Established Community Backer ***

Re: Setting up and billing for payment for independent contractors


@bk1959 wrote:

I'm not sure how to set up accounts (names, info) to match the client invoices with payments made to the ICs. Any advice would be appreciated.


To answer your question, you would need to turn on billable expenses in company settings, and if you want set a mark up.

 

Then when you pay the IC, select the customer that bill applies to, and when you create an invoice for the customer you can click add to bring that expense with or without markup to the invoice.

 

You make payments to the IC's as an expense regardless of whether or not the customer pays the invoice, and you charge customers with an invoice, that is your income,

7 Comments
ProAdvisor

Re: Setting up and billing for payment for independent contractors

The independent contractors are vendors. Select the box to add them to 1099's.

 

Enter their payments to the account use for them, ie, subcontractors.  Then code that acct. to box 7 in the 1099 feature so you can send them 1099s when the year is closed.

Content Leader

Re: Setting up and billing for payment for independent contractors

Hey @bk1959

 

Welcome to the QuickBooks Community and happy New Year!

 

In addition to what @lynda mentioned, we also created an article that walks you step-by-step through the setup process. Check it out ( How to Prepare and Send 1099-MISCs Forms to Independent Contractors Using QuickBooks Online (Plus) ) and let us know if you have any other questions!

Established Community Backer ***

Re: Setting up and billing for payment for independent contractors


@bk1959 wrote:

I'm not sure how to set up accounts (names, info) to match the client invoices with payments made to the ICs. Any advice would be appreciated.


To answer your question, you would need to turn on billable expenses in company settings, and if you want set a mark up.

 

Then when you pay the IC, select the customer that bill applies to, and when you create an invoice for the customer you can click add to bring that expense with or without markup to the invoice.

 

You make payments to the IC's as an expense regardless of whether or not the customer pays the invoice, and you charge customers with an invoice, that is your income,

Experienced Member

Re: Setting up and billing for payment for independent contractors


@Rustler wrote:

@bk1959 wrote:

I'm not sure how to set up accounts (names, info) to match the client invoices with payments made to the ICs. Any advice would be appreciated.


To answer your question, you would need to turn on billable expenses in company settings, and if you want set a mark up.

 

Then when you pay the IC, select the customer that bill applies to, and when you create an invoice for the customer you can click add to bring that expense with or without markup to the invoice.

 

You make payments to the IC's as an expense regardless of whether or not the customer pays the invoice, and you charge customers with an invoice, that is your income,



Thank you, Rustler! Very helpful info!

Experienced Member

Re: Setting up and billing for payment for independent contractors


@JamesOng wrote:

Hey @bk1959

 

Welcome to the QuickBooks Community and happy New Year!

 

In addition to what @lynda mentioned, we also created an article that walks you step-by-step through the setup process. Check it out ( How to Prepare and Send 1099-MISCs Forms to Independent Contractors Using QuickBooks Online (Plus) ) and let us know if you have any other questions!


Excellent info! Thanks, James!

Experienced Member

Re: Setting up and billing for payment for independent contractors


@lynda wrote:

The independent contractors are vendors. Select the box to add them to 1099's.

 

Enter their payments to the account use for them, ie, subcontractors.  Then code that acct. to box 7 in the 1099 feature so you can send them 1099s when the year is closed.


Thank you, Lynda!

Content Leader

Re: Setting up and billing for payment for independent contractors

@bk1959,

 

Our pleasure. What work do you plan to do with your contractors?