Tracking deposits and separating labor from materials for QuickBooks Self-Employed
Sometimes I have to purchase material for a job. Then At the end of the job they pay for it all with one check. When I deposit it into my bank account it pops up as income. When only 80% is . How do I separate it from income
Thanks for reaching out to the community. In your case with QuickBooks Self Employed, I'd make sure to keep an itemized record of each item you're claiming as a materials expense and hold onto the associated physical receipts.
Split up the business income (don't lump it all into one payment) so you know what was labour income and what was material costs for the job. You should track all of it, but the income needs to be separated so you know how much went to materials in relation to the total income from the job.
This way at the end of the year you can easily identify where the money went.
I'd also go the extra mile to write yourself a note for which items are material expenses for quick reference.
In reference to what @Rustler is talking about to (income - expenses = revenue), check out the accounting concept Cost of Goods Sold. This may help clarify what those material expenses represent to your business.