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Level 1

After I have recorded an invoice, how do I account for a referral fee that will be paid when the invoice is paid?

I am Of Counsel to a law firm. For certain matters, we split the fee. When I book the invoice in QuickBooks, I want to also book the referral fee expense that will be paid when the invoice is paid.

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Best answer 10-15-2018

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Community Champion

After I have recorded an invoice, how do I account for a referral fee that will be paid when the invoice is paid?

Customer (Client) Credit memo posting to an expense account you call Referral Fee. When you receive the payment against the invoice you also apply the credit. If you choose, in preferences, to automatically apply credits this will be done for you. I advise to not auto-apply in case you want to direct it to something else.

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Highlighted
Community Champion

After I have recorded an invoice, how do I account for a referral fee that will be paid when the invoice is paid?

Customer (Client) Credit memo posting to an expense account you call Referral Fee. When you receive the payment against the invoice you also apply the credit. If you choose, in preferences, to automatically apply credits this will be done for you. I advise to not auto-apply in case you want to direct it to something else.

View solution in original post

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Level 2

After I have recorded an invoice, how do I account for a referral fee that will be paid when the invoice is paid?

Tried creating a credit memo but you cannot credit the memo using expense accounts. What I did was issue the invoice and create a line item below named Referral Fee (expense account) that shows the amount deducting from the initial invoice.
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Level 15

After I have recorded an invoice, how do I account for a referral fee that will be paid when the invoice is paid?

If this Referral Fee is payable to some other name, you don't put anything on the customer's invoice or a credit memo. That is your Expense, a separate transaction.
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Level 1

After I have recorded an invoice, how do I account for a referral fee that will be paid when the invoice is paid?

Do you know what account you should use to cut a check to a vendor that is receiving the referral fee? Would you make a separate expense account titled "referral fee"?

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Level 2

After I have recorded an invoice, how do I account for a referral fee that will be paid when the invoice is paid?

I need to pay a referral fee out to a vendor that referred a customer to me. Once the customer has paid the invoice, i need to pay the vendor. Do i create this as an expense? Or do i create a vendor bill?

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Anonymous
Not applicable

After I have recorded an invoice, how do I account for a referral fee that will be paid when the invoice is paid?

Thanks for adding to the conversation, @tracyagardner,

 

Yes, you can use either of the two. Expenses are cash-based transactions, create it when recording real time payments to a vendor. Bills, on the other hand, are accrual transactions like invoices for goods or services received on credit. Follow the steps I've outlined for you:

 

Create an expense:

  1. Click on the Create ⨁ icon.
  2. Below the Vendors options, select Expense.
  3. Enter all the information you want to appear in every instance of the invoice.
  4. Hit Save and close.

Here's an article you can use for reference: How to enter, edit, or delete expenses?

Create a bill:

  1. Open the Plus (+) icon and select Bill.
  2. Choose a vendor name from the Vendor drop-down menu.
  3. Add a number or reference to distinguish this bill from others from the same vendor in the Bill No. field.
  4. Enter the other required information under the Category and Item details.
  5. Click Save and close.
  6. When you're ready to pay it, use the Pay bills method. 

I'm just a post away if you need further help, @tracyagardner. Feel free to check out the Community or mention me on your posts. Have a nice day!

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