Same entity as customer and vendor, apply credit toward bill

hcuster · ‎February 20, 2019

I have a client that I split certain profits with, but I also charge that client an administrative fee. How do I handle paying athis client (Vendor?) and have the admin fee deducted from the payment that I make?

So, I need the admin fee to show up as income, and have the full split profit amount show up in expenses (without the admin deducted).

Is there a way to do this?

Thanks.

qbteachmt · ‎February 20, 2019

@Rasa-LilaM

Please Learn from this input. Please Stop recommending that people use AP manually on a Check, because in Desktop, that isn't supposed to be a Check at all. If that is AP, you use the Vendor function of Pay Bills. You have this backwards, starting with the banking and using the wrong Transaction Type and the wrong function. You don't start with Banking, for paying vendor bills (AP). You start with Vendor Menu and the Pay Bills function, and the Bills have to exist already.

@hcuster

Let's review: "I have a client that I split certain profits with,"

Which makes that a Vendor Name, and you need to honor that the name is Separate for purposes of tracking and reporting.

"but I also charge that client an administrative fee. How do I handle paying athis client (Vendor?) and have the admin fee deducted from the payment that I make?"

You are describing Barter so make a Bank account and name it Barter. You are describing that, for convenience, we will avoid trading Funds for the gross, and end up at Net for the banking.

"So, I need the admin fee to show up as income,"

Charge the Customer. You can Invoice them, and then "receive Payment" for the amount being Bartered and Deposit to the Barter Bank. Now this Bank has a positive value you can use to Pay the Vendor Name.

"and have the full split profit amount show up in expenses (without the admin deducted)."

That's called Gross. Gross = in full. Now you are ready to use Banking menu > Write Check and Pay the Vendor Name from the Real Bank. Enter the data like this:

Commission you owe as Gross (in full) Expense and as a Positive value here

Second line, Negative and the Barter Bank here and that bartered amount (= that Holdback)

= The Net to pay, now.

And for that one date, barter Bank should end at 0, because that is what this means.

Is there a way to do this?

View solution in original post

Rasa-LilaM · ‎February 20, 2019

It’s great to see you in the QuickBooks Community, hcuster.

I’m here to ensure the admin fee is properly recorded, so it will show as income on the Profit and Loss Report.

All you have to do is to write a check and select the correct posting account. Let me walk you through the steps.

Here’s how:

Go to Banking at the top menu bar, then choose Write Checks.
On the Write Checks window, click on the drop-down for Bank and select the correct account.
Fill in the necessary fields.
Go to the Expenses tab.
Click on the drop-down for Account, then select Accounts Payable.
Enter the payment in the Amount column.
Go to the next line, then select the admin fee.
Enter a negative amount in the Amount column.

I've attached screenshots for visual reference:

There you have it. Once you open the report, you should see the admin fee posted under income.

If you have any other concerns or additional questions about QuickBooks, post a comment below. I'll be around to help. Wishing you the best.

qbteachmt · ‎February 20, 2019

@Rasa-LilaM

Please Learn from this input. Please Stop recommending that people use AP manually on a Check, because in Desktop, that isn't supposed to be a Check at all. If that is AP, you use the Vendor function of Pay Bills. You have this backwards, starting with the banking and using the wrong Transaction Type and the wrong function. You don't start with Banking, for paying vendor bills (AP). You start with Vendor Menu and the Pay Bills function, and the Bills have to exist already.

@hcuster

Let's review: "I have a client that I split certain profits with,"

Which makes that a Vendor Name, and you need to honor that the name is Separate for purposes of tracking and reporting.

"but I also charge that client an administrative fee. How do I handle paying athis client (Vendor?) and have the admin fee deducted from the payment that I make?"

You are describing Barter so make a Bank account and name it Barter. You are describing that, for convenience, we will avoid trading Funds for the gross, and end up at Net for the banking.

"So, I need the admin fee to show up as income,"

Charge the Customer. You can Invoice them, and then "receive Payment" for the amount being Bartered and Deposit to the Barter Bank. Now this Bank has a positive value you can use to Pay the Vendor Name.

"and have the full split profit amount show up in expenses (without the admin deducted)."

That's called Gross. Gross = in full. Now you are ready to use Banking menu > Write Check and Pay the Vendor Name from the Real Bank. Enter the data like this:

Commission you owe as Gross (in full) Expense and as a Positive value here

Second line, Negative and the Barter Bank here and that bartered amount (= that Holdback)

= The Net to pay, now.

And for that one date, barter Bank should end at 0, because that is what this means.

Is there a way to do this?

hcuster · ‎February 23, 2019

Brilliant! Setting up a "Barter" account and dealing with the situation in this way makes total sense to me. Thank you so much for your help in relieving my confusion!

qbteachmt · ‎February 23, 2019

Glad to help. By the way, the IRS describes it as such, too. Barter = not swapping Banking, but still as full values.

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Same entity as customer and vendor, apply credit toward bill