I purchased and installed the QB Desktop software some months ago, and asked a similar question. I can no longer find it. I have several questions and situations for our Independent Contractors (IC). For starters, we are a small taxi service that serves several small, somewhat contiguous towns. As such, my wife and I do most of the driving and all income, including tips pass straight to the company. Accounting for these is straight forward. Before we begin, the governor actually signed a law stating that taxi drivers and TNS (Uber/Lyft) drivers meet the definition of independent contractors; I say this because some have pointed me to laws in other states where statutes define them as employees. We have gotten to the point that we are using IC drivers more often, so we need to make sure that we have our cash flow accounting properly configured.
When my wife or I drive, our cash flow goes as follows:
2) (Credit Card) Receive Square payment from passenger ---> Square holding account ---> Fees Deducted ---> Transferred to Checking Account.
3) (Billed) Invoice for billed accounts ---> Check Received ---> Undeposited Cash ---> Checking Account.
With IC drivers:
1) (Cash) Driver receives cash from customer ---> Driver pays amount due company at end of night.
2) (Credit Card) Driver Receives no payment ---> Amount due driver deducted from what driver owes company ---> Square AR to Square holding account ---> Fees Deducted ---> Transferred to Checking Account --> Driver AR credited with payment.
3) (Billed) Driver Receives no payment ---> Amount due driver deducted from what driver owes company ---> Client invoiced ---> Check received ---> Undeposited cash ---> Check received --> Driver AR credited with payment.
<----------- Questions ---------------->
1) Are the IC drivers considered direct sellers or is their income 1099 "Other Income?"
2) Since the company is not actually receiving payment from drivers at the time of sale, how do I account for the fact that the driver has this cash that belongs to the company? As of now, I have drivers set up as both vendors and customers and am invoicing the drivers at the end of shift, listing their services as expenses.
3) Especially when we are crediting the driver for credit card and billed accounts, how do I show that I have credited the driver without getting my books out of agreement?
4) How do I get driver as customer and driver as vendor to show up on the same statement at the end of the shift?
To solve this, I have (a) entered & paid a few bills from driver/vendor, (2) Invoicing driver/customer for whole amount of fare (3) crediting driver/customer with amount from driver/vendor bill. However, I think that this process is unbalancing the books.
Hi, I’m needing some help I’m a ic for a cab company, I receive cash credit cards, I have my own square account so all payments go to me. I have a question about the lease I pay every day or at that end of my shift. What do I Categorize it under?