How to record that a customer (HOA member) paid a company (HOA) bill (for repairs to their unit)?

Andrew R · ‎April 13, 2024

I tried entering a bill but did not see a way to associate it with the customer.

I entered a credit to the customer and associated it with their monthly dues payment but I now have a deposit to record.

How can I record this properly?

Archie_B

Hello there, Andrew R.

I understand how difficult it can be to manage vendor bills and payments/funds from HOA members. I'll chime in and explain how to properly record this in QuickBooks Desktop.

There is a different approach to this that ensures your member receives credit for the payment they made directly to the vendor. But first, you can delete the entries you created to make sure that we do not create any irreconcilable entries.

To do this, we'll have to first create a bill for the full HOA due amount of $800 to the vendor. Then, set up a clearing account to track your member's payment to the vendor. This is commonly used in accounting to track transactions that involve the exchange of goods or services between parties.

To set up a clearing account:

GO to the Lists menu, then Chart of Accounts.
Right-click anywhere in the Chart of Accounts window, then hit New.
In the Add New Account window, select the Bank radio button.
Click on Continue.
In the Account Name field, enter Clearing Account, Barter Account or Wash Account.
Do NOT enter an opening balance.
Select Save & Close.

Then, make a deposit to the clearing account we just created. Like this:

Go to the Banking menu, then choose Make deposit.
Select the clearing account we created earlier in the Deposit to dropdown.
In the Make deposit window, click on the Received from dropdown, and select the HOA member.
In the From Account dropdown, choose Accounts Receivable.
Enter the amount your member paid ($140).
Click Save & Close.

Once done, create a bill payment to the vendor using the clearing account with the same amount ($140) the member paid.

This process will also automatically create a credit to your member and ensure that your vendor-due amount is reduced.

As mentioned by my colleague above, it is also best to consult an accountant for guidance and other options in recording these types of transactions.

I've also added this resource as a future reference, particularly for managing HOA vendor dues: Accounts Payable workflows in QuickBooks Desktop.

If you still need help or have other concerns about bills, bill payments, or invoices, let me know in the comment section below. Have a wonderful day!

View solution in original post

IrizA

I'm here to help you record your customer's payment, Andrew.

Since you're recording a customer's payment after repairing their unit, you can simply create a bill for the transaction first and ensure that you've ticked the Bill column since this is billable. Next, you can create an invoice and apply the created bill. Afterward, you can now record a Receive Payment.

Here's how:

Step 1: Create a Bill.

If you already did this step, you can proceed to step 2.

Go to the Vendors menu then choose Enter Bills.
In the Vendor dropdown, choose the name of your vendor.
Click either the Expenses or Items tab.
Enter your preferred amount.
In the Customer: Job dropdown, choose a customer.
Under the Bill column, tick the provided box.
Fill out the rest of the provided field.
Once done, click Save & Close or Save & New.

Step 2: Apply the created bill to your invoice.

Go to the Customers menu and choose Create Invoices.
Choose the specific customer in the Customer: Job dropdown.
A prompt will pop up. Ensure to tick the Select the outstanding billable time and costs to add to this invoice option.
Press OK.
In the Expenses tab, put a checkmark right beside the Date column. Then press OK.
Fill out the rest of the necessary fields, such as the Date, Item, Quantity, Rate, Amount, and Tax.
Once done, press Save & Close or Save & New.

Step 3: Proceed to record the Receive payment.

Go to the Customers dropdown and press Receive Payments.
In the Received From dropdown, choose the name of your customer that you've selected as you create your invoice.
You'll see some transactions after selecting the name of your customer.
Tick the transaction you've created, and ensure it contains the same information, such as the Date and the Amount.
Review everything.
Once done, press Save and Close.

Furthermore, you can also use these articles to run a report and customize it according to your preferences since the first one contains some videos and the second one contains some detailed steps that can walk you through the process:

If there's anything else that you'd like to ask, kindly leave your inquiries down below and we'll help you in any way we can.

Andrew R

I think I missed a key point in my question. This bill is not an extra amount to be the responsibility of the member but a shared HOA expense that the member paid for themselves. I need to give the member credit off of their regular dues since they paid and it was actually the responsibility of the HOA to pay. The bill is not to be invoiced to the customer, it is the HOA/'s responsibility to pay it.

jAldrenA

Thanks for filling me in with those details, @Andrew R. Your explanation gives me a clearer picture.

Let's tackle this together so we can ensure everything is recorded accurately.

To adjust the regular dues of a member to account for the payment they made towards a shared HOA expense, you need to first record the payment made by the member. Simply specify the amount paid and the date of the payment.

Next, generate a credit memo for the member to adjust their regular dues. This credit memo represents the amount they contributed towards the shared HOA expense that the HOA was responsible for paying.

Ensure that the credit memo is associated with the member's account to reflect accurately in their financial records. Then, apply the credit memo toward the member's regular dues. This will reduce the amount they owe for their next payment.

Since the member's payment was applied as a credit, you'll now need to record the deposit of the payment into your bank account.

Feel free to read this article for more details: Record transactions for a property management company.

I also recommend consulting with your accountant for personalized guidance. If you don't have an accountant, we can assist you in finding one nearby who can provide expert advice tailored to your specific needs.

I've included an article that will guide you on how to customize any report you generate: Customize reports in QuickBooks Desktop.

If you have any questions or need clarification about recording payment for the repair bill, feel free to ask. We're here to guide you through the process and ensure accurate recording.

Andrew R

I'm a bit confused. Let's make this concrete.

The HOA member dues are $800.

The member made a payment of $140 to a vendor that is the HOA's responsibility to pay.

Here is what I tried to record this:

I entered a bill for $140

I entered a credit for the member for $140 and applied it to their invoice.

I entered a dues payment for the member of $660

When I entered the $140 credit, it appeared in Payments to Deposit. I don't understand why this happens. I am not going to deposit the $140 into the bank account. This would be an error in the check register I think.

I also don't know how to deal with the outstanding bill for $140. I would like to be able to mark it as paid by the member. Should I skip making the bill?

Please explain where my thinking is mistaken and what I am missing.

Archie_B