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RMorasse
Level 1

Entering Checks

I have a customer that had an outstanding balance. I wrote off the balance and handed it over to collections. Now I received a check for 150.00 from the collection agency.  The customer paid 200, 50 was taken by the collection agency and 150.00 was sent to me.  What is the proper way to enter this so that is is allocated properly to customer and collection agency fee?

Solved
Best answer March 18, 2020

Best Answers
JasroV
QuickBooks Team

Entering Checks

Thanks for sharing the details with us, @RMorasse.

 

You'll want to create a service item for the collection fee in your invoice to satisfy the check. Then enter a line item in the invoice for the collection with a negative amount. Let me show you how in your QuickBooks Desktop (QBDT).

 

Here's how:

  1. Go to the Lists menu.
  2. Select Item List.
  3. Click the Item drop-down menu and select New.
  4. Select Service from the drop-down arrow as the item type.
  5. Type Collection fee as the item name under the Item Name/Number field.
  6. Then choose an income account from the Account drop-down arrow (you can talk with your accountant on
  7. the right income account to choose).
  8. Once done, click OK.

Here's an article you can read for more details: Add, edit, and delete items.

 

Once done, add a line item to the invoice. Here's how:
  1. Go the Customers menu.
  2. Select the appropriate customer.
  3. Open the Invoice.
  4. Add a line item in the invoice for the collection.
  5. Enter a negative amount of -50 in the Amount column.
  6. Click Save and close.

Then in case in the future you accidentally apply a credit to a wrong invoice, you can refer to this article on how to handle the situation: Remove or unapply a credit from an invoice or bill.

 

You can get back to us whenever you have further questions. We're always here to help. Take care and stay healthy!

View solution in original post

3 Comments
Tori B
QuickBooks Team

Entering Checks

Hey there, @RMorasse

 

I hope your day is going great. 

 

For this I recommend reaching out to your accountant to know the best course of action to record this in your company file. In the meantime, you can check out this thread about collection agencies and how to record it:  https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/sent-to-collections/00/1934....

 

Also, you can find a local accountant to assist you from our home page here in the Community. Scroll down the home page in the Resources section and click Find your match under Find an expert

 

Please let me know if there's anything else that I could assist you with. I'll be on the lookout for your reply. You can always reach out to the Community or me anytime you find you need help. Take care and have a good one! 

RMorasse
Level 1

Entering Checks

Thanks for the reply, but the provided link does not realy apply. My accountant can tell me how to enter it from an accountant point, but he does not understand quickbooks.

He said I should create a bill from the collection agency for 50.00 and an invoice for the customer for 150.00. Thats good, but now I have 1 check for 150.00 and somehow need to satisfy both the invoice and the bill.

JasroV
QuickBooks Team

Entering Checks

Thanks for sharing the details with us, @RMorasse.

 

You'll want to create a service item for the collection fee in your invoice to satisfy the check. Then enter a line item in the invoice for the collection with a negative amount. Let me show you how in your QuickBooks Desktop (QBDT).

 

Here's how:

  1. Go to the Lists menu.
  2. Select Item List.
  3. Click the Item drop-down menu and select New.
  4. Select Service from the drop-down arrow as the item type.
  5. Type Collection fee as the item name under the Item Name/Number field.
  6. Then choose an income account from the Account drop-down arrow (you can talk with your accountant on
  7. the right income account to choose).
  8. Once done, click OK.

Here's an article you can read for more details: Add, edit, and delete items.

 

Once done, add a line item to the invoice. Here's how:
  1. Go the Customers menu.
  2. Select the appropriate customer.
  3. Open the Invoice.
  4. Add a line item in the invoice for the collection.
  5. Enter a negative amount of -50 in the Amount column.
  6. Click Save and close.

Then in case in the future you accidentally apply a credit to a wrong invoice, you can refer to this article on how to handle the situation: Remove or unapply a credit from an invoice or bill.

 

You can get back to us whenever you have further questions. We're always here to help. Take care and stay healthy!

View solution in original post

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