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Anonymous
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Paid a bill on behalf of vendor, wanting to apply credit towards future bills from vendor

Hello QB Help Community,

 

Background Info: Our company is on an accrual basis. Every month we enter a bill for rent and then generate a Bill Pmt -Check that is payable to the landlord. Last month we offered to pay our landlord's tax bill for the space we're in, in lieu of our monthly rent. The tax bill was more than a couple months of rent, so I need to track the credit. I also need to reconcile last month's bank statement which includes this large check to the tax authority.

 

Question: What is the best way to enter this accurately? I entered a bill for rent and assigned the amount to our "Rent" account, left unpaid. I can enter a check for the tax payment without an associated bill (since it was not billed to our company anyway) and assign the credit to the same "Rent" account. On a P&L, our Rent line will be balanced, but is there a way to specifically assign the tax payment to the rent bill each month until the credit is used up?

 

Thanks in advance

Solved
Best answer 12-19-2018

Accepted Solutions
Established Community Backer ***

Re: Paid a bill on behalf of vendor, wanting to apply credit towards future bills from vendor

As an Accrual Basis entity, you would enter the Rent Bill as usual.

 

The check to the tax agency is posted to Other Current Asset.

 

The Bills are paid by the use of a Vendor Credit, pulling from the Other Current Asset, until that balance is Used Up = applied to the rent owed.

5 Comments
Established Community Backer ***

Re: Paid a bill on behalf of vendor, wanting to apply credit towards future bills from vendor

You are paying the landlord, what he does with it is immaterial.

use pay bills, select the bill, enter the full amount actually paid, use rent expense.  QB will ask if you want to keep the over payment as a vendor credit, do so and next month you can apply all or part of the credit to the next bill.

Anonymous
Not applicable

Re: Paid a bill on behalf of vendor, wanting to apply credit towards future bills from vendor

Thanks for your reply!

 

So the tax payment was made directly to the tax collector and not to our landlord. The landlord was not involved in the transaction except to acknowledge that we paid their bill and to accept that in lieu of monthly rent. That is why I want the payment to reflect who the payee actually was.

 

Maybe this does not matter, but I did not want there to appear to be a discrepancy between who we sent money to; though I suppose you would be right that in the aggregate we have effectively paid the landlord.

QuickBooks Team

Re: Paid a bill on behalf of vendor, wanting to apply credit towards future bills from vendor

It's good to have you here, @devons.

 

Indeed, @Rustler is correct! Allow me to add more information about recording and applying your tax payments in QuickBooks.

 

Here's the workflow to record your account's payables:

 

Step 1: Enter bills
Step 2: Pay bills

 

For recording and accounting purposes, use "Rent Expense" as its account and enter your name as the Payee.

 

You may also check out the available QuickBooks video tutorials for additional insights.

 

That should do it! This should let you account for the tax payments you made in lieu of your monthly rent.

Established Community Backer ***

Re: Paid a bill on behalf of vendor, wanting to apply credit towards future bills from vendor

As an Accrual Basis entity, you would enter the Rent Bill as usual.

 

The check to the tax agency is posted to Other Current Asset.

 

The Bills are paid by the use of a Vendor Credit, pulling from the Other Current Asset, until that balance is Used Up = applied to the rent owed.

Anonymous
Not applicable

Re: Paid a bill on behalf of vendor, wanting to apply credit towards future bills from vendor

Great idea!! I feel comfortable logging the transaction this way so that what happened is very clear to whomever may manage the books in the future. Thanks!

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