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specialk6995
Level 1

Deducting bill payments owed by a Vendor

I have a Vendor who borrowed money from our company for repairs on his truck. I first had it in as an invoice. Then I switched it to a bill. (Hot mess here) bare with me. There are actually 2 different bills. I pay this vendor for work completed on a weekly basis. I deduct payments from his weekly check to be applied towards those bills. Expense acct Repairs and Maintenance. How do I record his weekly payments deducted from his pay to bring down the total bill. Only way I know how to explain this, please help!

6 Comments
ShiellaGraceA
QuickBooks Team

Deducting bill payments owed by a Vendor

Thanks for visiting us here today, @specialk6995.

 

I have some information about recording your vendor payment. You'll want to delete the bill you've created for the borrowed money. Instead, create an asset account to track the vendor receivables payable by the borrowed amount. Then, create a service item using the asset account as your expense account. Lastly, enter a vendor credit to deduct the borrowed money. Let me walk you through how.

 

To create an asset account:

 

  1. Click Gear, and then Chart of Accounts.
  2. Click New, then choose Other Current Assets in the Account Type, and select Loan to Others in the Detail Type.
  3. Click Save and Close.

After creating an account, enter a check or an expense transaction to record the borrowed money.

 

  1. Go to +New, then tap Check or Expense.
  2. Under Products/Service, tick the field and choose +Add new.
  3. Pick Service and enter a name of the loan or borrowed money. 
  4. Scroll down towards the Expense account drop-down and take the asset account you've created above.
  5. Click Save and close.

 

Once done, create a credit memo using the service item. This will deduct the asset account automatically. Just go to +New, and then Vendor credit.

 

Below are the images of how they look like.

bm1.png bm2.png bm3.png bm4.png

 

I've also added this link here in case you need help with other tasks in QBO. It has topics with articles that'll guide you along the way.

 

Keep me posted if you still have questions or concerns with vendor transactions. I'm always here to help. Take care and stay safe.

specialk6995
Level 1

Deducting bill payments owed by a Vendor

Where do I enter the money borrowed

MirriamM
Moderator

Deducting bill payments owed by a Vendor

Hello again, @specialk6995.

 

To enter the money borrowed, you'll need to enter a check or an expense transaction. Then create a vendor credit as suggested by my colleague @

ShiellaGraceA. Ensure to enter the correct amount in the Amount field.

 

To do this, here's how:

 

To create an expense or check transaction:

  1. In the left menu, click the + New button.
  2. Select Expense or Check.
  3. Enter the Vendor's name and other fields.
  4. Go to the Item details section, select the service item created. 
  5. In the Description column, enter what you pay.
  6. In the Amount field, enter the amount.
  7. Click Save and close.

To create a vendor credit:

  1. In the left menu, click the + New button.
  2. Select Vendor credit.
  3. Enter the Vendor's name and other fields.
  4. Go to the Item details section, select the service item created. 
  5. In the Description column, enter what you pay.
  6. In the Amount field, enter the amount.
  7. Click Save and close.

For more details, refer to this article: Enter bills and record bill payments in QuickBooks Online.

 

In case you want to run a report on all the money paid to a vendor, here's a resource you can check for guidance: Run a report with vendor totals.

 

Let me know if you have any issues after following those steps. I’m always here to help. Have a good one!

specialk6995
Level 1

Deducting bill payments owed by a Vendor

Thank you both for your help and please don't leave me because I'm gonna need you again I'm sure. You are a GREAT help to me

specialk6995
Level 1

Deducting bill payments owed by a Vendor

I still am not getting the purpose of the Vendor Credit. This vendor is an owner operator leased to our company. I have done all the steps and even went back and corrected his deductions for the loan on his pay. Each deduction is now under Loans to Others asset account created. I have also made the check for all items using the connected product/service I made. Can I add items to this check or do I need to make a new one for more money borrowed in the future because he has another bill coming for repairs to his truck. I went to COA and looked at the Loans to Others register. All of his payments are there. Can you explain the vendor credit?

AbegailS_
QuickBooks Team

Deducting bill payments owed by a Vendor

Thanks for reaching out to us, specialk6995.

 

Let me enlighten you on how vendor credit works. In QuickBooks Online (QBO), you enter a vendor credit to record returns to vendors or refunds from vendors.

 

The way the credit is entered depends on how the purchases are recorded.

 

To further assist you, I'll provide you an article on applying vendor credits to vendor payment.

 

 

Just let me know if you need further assistance. I'll be here to help you.  

 

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