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Join nowWe have an unusual situation. We are a construction company with a specialized product that is usually financed by a 3rd party lender. One of the lenders has just started paying our largest materials supplier directly. When the vendor is paid in full the balance of the contract comes to us. So we create an invoice to the customer for the full contract. We record the bills from our supplier in accounts payable. I have created a "bank account" that I use to clear the entries. When payment is issued to our vendor I record a customer payment through the bank account, then pay accounts payable through the same account so the balance is zero.
This method has worked well until an unusual transaction has come up. This time the first payment from the lender to our vendor was for more than the total cost of materials. So they issued a refund to themselves. My customer is overpaid and my vendor is overpaid on my books. I am not sure how to record the transaction where the lender refunds themselves. I could use a journal entry but would prefer not to. Any ideas?
Hi there, RonG-Fresno.
We'd want to make sure that we get this sorted out. Can you tell us if the lender was set up as a vendor?
For now, it's best to create a journal entry to clear out the balances of the customer and vendor in QBO. This is to make sure that the invoices and bills are not affected. Here's how to create a journal entry in case you need an extra guide:
Here's an article about this process for more details: Create a Journal Entry in QuickBooks Online.
Although, other members of the Community forum might also jump in and share their ideas. Just keep an eye for any notifications from the Community so you can read all the responses from other users.
I also have these additional articles to give you for additional references when getting refunds and recording journal entries:
Visit us anytime you have questions or other concerns. I'll be around to assist you again. Thanks!
The lender is not a vendor but a payment method. The materials supplier is a vendor. So it looks like my best method is to make a journal entry with the first line being to accounts payable/vendor and the second line to accounts receivable/customer. I was planning to use that method but had hoped something could be worked out with receiving a payment and paying a bill.
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