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How do I set QB up to collect money for third party services and not show it as income? How do I properly pay these third party sources?

 
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Best answer 09-04-2019

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Anonymous
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Re: How do I set QB up to collect money for third party services and not show it as income? How d...

Welcome back, @hmb6329,

 

Thank you for providing this in-depth information about what's going on. Let me give you a step-by-step process on how to handle third-party expenses using personal funds.

 

First, since you're assigning this item to customer quotes, you can create a new service item with a different Income Account. Here's how:

 

  1. From the Gear icon, choose Product and Services under List.
  2. On the Products and Services page, click on New and select Service.
  3. Enter the name of the rent service item.
  4. Then, select a Liability Account from the Income account drop down. This way it will not show as an income in the P&L report.
  5. Click on Save and close.

To record a spending, perform the steps below:

 

  1. Enter a journal entry to record the transaction by clicking the Create icon (+).
  2. Choose Journal Entry.
  3. Enter the correct expense Account for the purchase.
  4. In the Debit column, enter the amount.
  5. On the second line, enter the Owner's equity or Partner's equity.
  6. Add the purchase amount in the Credits column.
  7. Hit Save and close.
     

To reimburse them for the company expense, you can enter it as a check or as an expense.

 

Reimburse using check:

 

  1. Click  the Plus icon (+).

  2. Choose Check from the list.

  3. In the Payee field, enter the name of the partner/owner.
  4. Enter the Bank Account for the reimbursement.
  5. In the Category column, select Partner's Equity or Owner's Equity.
  6. Add the Amount.
  7. Select Save and close or Save and new.
     

Record the refund as an expense:

 

  1. Click the Create icon (+) on the Toolbar.

  2. Select Expense.

  3. In the Payee field, add the owner's name.
  4. Select the Payment account.
  5. In the Category column, choose Partner's Equity or Owner's Equity.
  6. Fill out the Amount of the reimbursement.
  7. Hit Save and close.
     

You can also refer to this article for the complete steps: How to pay for business expenses with personal funds

 

If you have any questions with the steps, I want you to know that I am here for you. Thanks for visiting our forums. Have a great day!

View solution in original post

5 Comments
Anonymous
Not applicable

Re: How do I set QB up to collect money for third party services and not show it as income? How d...

Hi @hmb6329,

 

It's my pleasure to help you record your sales transactions correctly so you're books are accurate. However, I need to gather a few pieces of additional information from you to make sure we're on the same page.

 

When you say you're collecting funds for third party services, is it like consignment? If not, can you elaborate the process on how you work with them? I need this information to make sure I'm providing you the best resolution to your concern.

 

In the meantime, if you're talking about consignments, here's an article to guide you on how to set it up: 

How to record consignment sales?

 

Please update me anytime, @hmb6329. I'll be waiting for your response on this. Have a nice day!

 

 

 

Not applicable

Re: How do I set QB up to collect money for third party services and not show it as income? How d...

Hello Jen and thank you for responding to my question.  What I have been doing is collecting fees from my clients that are for city and county fees.  In other words, I am acting like a representative for my client and dealing with the city or county on their behalf.  I pay the city county fees and my client pays me back for paying the fees.

 

When I provide a quote to my client, I insert the city and county fees along with my personal fee.  However what I have been collecting from them is showing up as income for me.  How do I avoid showing it as income?

Anonymous
Not applicable

Re: How do I set QB up to collect money for third party services and not show it as income? How d...

Welcome back, @hmb6329,

 

Thank you for providing this in-depth information about what's going on. Let me give you a step-by-step process on how to handle third-party expenses using personal funds.

 

First, since you're assigning this item to customer quotes, you can create a new service item with a different Income Account. Here's how:

 

  1. From the Gear icon, choose Product and Services under List.
  2. On the Products and Services page, click on New and select Service.
  3. Enter the name of the rent service item.
  4. Then, select a Liability Account from the Income account drop down. This way it will not show as an income in the P&L report.
  5. Click on Save and close.

To record a spending, perform the steps below:

 

  1. Enter a journal entry to record the transaction by clicking the Create icon (+).
  2. Choose Journal Entry.
  3. Enter the correct expense Account for the purchase.
  4. In the Debit column, enter the amount.
  5. On the second line, enter the Owner's equity or Partner's equity.
  6. Add the purchase amount in the Credits column.
  7. Hit Save and close.
     

To reimburse them for the company expense, you can enter it as a check or as an expense.

 

Reimburse using check:

 

  1. Click  the Plus icon (+).

  2. Choose Check from the list.

  3. In the Payee field, enter the name of the partner/owner.
  4. Enter the Bank Account for the reimbursement.
  5. In the Category column, select Partner's Equity or Owner's Equity.
  6. Add the Amount.
  7. Select Save and close or Save and new.
     

Record the refund as an expense:

 

  1. Click the Create icon (+) on the Toolbar.

  2. Select Expense.

  3. In the Payee field, add the owner's name.
  4. Select the Payment account.
  5. In the Category column, choose Partner's Equity or Owner's Equity.
  6. Fill out the Amount of the reimbursement.
  7. Hit Save and close.
     

You can also refer to this article for the complete steps: How to pay for business expenses with personal funds

 

If you have any questions with the steps, I want you to know that I am here for you. Thanks for visiting our forums. Have a great day!

View solution in original post

Not applicable

Re: How do I set QB up to collect money for third party services and not show it as income? How d...

Hi 

 

 

 
Highlighted
QuickBooks Team

Re: How do I set QB up to collect money for third party services and not show it as income? How d...

Let me share additional information so you'll be able to track your actual income, @tnnt97.

 

When tracking transactions, you can associate each items or services included on it to a specific income or expense account. You'll have to split the amount you receive from your customers so you'll be able to record your actual income.

 

First, let's create a service item for the application fees.

 

Here's how:

  1. Go to the Gear Icon.
  2. Choose Product and Services.
  3. Click New.
  4. Pick Service.
  5. Use Application Fee as its name.
  6. In the Income Account section, choose the expense account you want to use.
  7. Click Save and Close.

Once completed, you can now create a separate service item. Use this service item to record your actual income. Ensure to associate it with your desired Income account.

Also, I'd recommend consulting with your accountant so you'll be able to accurately track your income transactions.

 

If you have other questions, feel free to click the Reply button below. I'm always here 

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