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tonyd
Level 1

Provision on Accounts Receivable and Payable how to enter in Quickbooks

Hello All... 

 

I am new to this form but I previously was lurking around.  I am currently having a issue with how to record some invoice/payments on Quickbooks. 

 

We are a wholesaler and we have a customer (distributor) that pays us within 30 days (NET30).  Lately there has been Provision for receivables (a temporary credit memo) as they have forecasted different associated fees that are due to them from us.  This usually gets cleared within a few days after invoices are due, and then we would see a Provision for receivables reversal.  

 

Previously we would create a invoice for this provision receivable and then offset with a credit memo.  But upon thinking about it, if we create a invoice, it would be considered as income, which it shouldn't be as it is just a temporary credit that gets cleared after.  

 

The other issue is that this customer lumps payment together which may include multiple invoices, so they would deduct these provisions and credit these provisions to specific invoices we have open.  It can get very confusing, and right now we are a bit confused as to how to treat these cases without improperly recording such information.

 

Any help and insight would be greatly appreciated, further detail can be provided as well.

 

Thank you,

Tony

 

10 Comments 10
Rustler
Level 15

Provision on Accounts Receivable and Payable how to enter in Quickbooks

You should issue an invoice for the sale to the distributor

 

Income is reported in accrual basis reports as the date of the sale (invoice is saved) and that is correct accounting

 

Income is reported in cash basis reporting as of the date the payment is entered, not when the invoice is created/saved

 

You receive payment and check off the invoices the lump sum payment applies to

 

qbteachmt
Level 15

Provision on Accounts Receivable and Payable how to enter in Quickbooks

You describe Barter, not "provision" as credit memo.

The Customer also is your Vendor, because you Owe them. You would Pay them, but there is a holdback = Barter.

Make a Bank account and name it Barter. Pretend to Pay the holdback using Write Check from Barter Bank, for the vendor name as payee for what you "paid them" by Holdback. For that Same Date, you Receive Payment from the Customer Name for that same amount and "Deposit" to Barter Bank. It ends at 0 for this one date, if you did it right.

korbis
Level 1

Provision on Accounts Receivable and Payable how to enter in Quickbooks

I have the exact same question/concern as Tony. It's regarding Amazon Vendor Central as our customer, maybe you too?

 

In any case, are there any other methods for properly managing this kind of payment relationship that Tony has described? Delayed Charge is the closest function in QBO, but it is non-posting (will not affect customer balance) and also must be added to an invoice which will affect the true balance of the invoice it is applied to.

 

David

GlinetteC
Moderator

Provision on Accounts Receivable and Payable how to enter in Quickbooks

Hi there, David.

 

As mentioned by @qbteachmt, you may consider adding a bank account name as Barter to pay the holdback using a check from the Barter bank you've created. Please note of the same date you received the payment from your client and then deposit them to the Barter account.

 

Let us know if you have any other concerns.

zaphira
Level 1

Provision on Accounts Receivable and Payable how to enter in Quickbooks

Hello - I'm having the same issue with Amazon VC provision for receivables. Did you find a method that works for you? Was the Barter Account method correct?

I'm finding it extremely challenging to clear off payments received correctly with these provisions that are later credited back. 

zaphira
Level 1

Provision on Accounts Receivable and Payable how to enter in Quickbooks

Hello - I'm having the same issue with Amazon VC provision for receivables. Did you find a method that works for you? Was the Barter Account method correct?

I'm finding it extremely challenging to clear off payments received correctly with these provisions that are later credited back.

Divina_N
QuickBooks Team

Provision on Accounts Receivable and Payable how to enter in Quickbooks

Thanks for getting back here, @zaphira. I'm here to further help you enter provisions in QuickBooks Desktop (QBDT).

 

Yes, you can perform the barter method in clearing off payments received with provisions that later be credited back. To do so, you can follow the steps provided by, qbteachmt.
 

I also recommend reaching out to your accountant to further validate the process to ensure you'll enter your transactions accurately in QBDT. If you're not affiliated with one, you can use our Find an Accountant tool to look for a QuickBooks-savvy accountant near your area.

 

I've also attached this helpful article to guide you in tracking your customer transactions in QBDT: Get started with customer transaction workflows in QuickBooks Desktop.

 

In QBDT, it's easy to monitor your customers and sales transactions by pulling up predefined customer, job, and sales reports. You can also modify the reports to display the data you need.

 

Feel free to leave a reply below if you need further assistance entering provision in QBDT. I'd be happy to assist you further. Have a good one.  

DC1906
Level 1

Provision on Accounts Receivable and Payable how to enter in Quickbooks

What are the entries for the Amazon Provision for Receivable using the Barter Account?

SueHam
Level 1

Provision on Accounts Receivable and Payable how to enter in Quickbooks


@zaphira wrote:

Hello - I'm having the same issue with Amazon VC provision for receivables. Did you find a method that works for you? Was the Barter Account method correct?

I'm finding it extremely challenging to clear off payments received correctly with these provisions that are later credited back.


 

Hi Zaphira,

 

Just wondering, did this method work for you or did you find another way of dealing with this? I'm having major problems trying to mark invoices as 'paid' that are included in a remittance with Provision of Receivables.

 

Thank you.

Sue

SueHam
Level 1

Provision on Accounts Receivable and Payable how to enter in Quickbooks

Hi,

 

Just wondering, did the barter method work for you or did you find another way of dealing with this? I'm having major problems trying to mark the invoices included in the same remittance as Provision of Receivable as 'paid'.

 

Thank you.

Sue

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