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I own a medical clinic and I purchased a piece of equipment through a laboratory diagnostic service/equipment vendor. This vendor has a reward system similar to a point system used with credit card companies where you accumulate 'points' through monthly service purchases. These points can be used toward the monthly lease payments, as long as I spend 'X' amount of dollars with them, my monthly lease expense is covered. I do not ever anticipate actually making monetary payments toward this lease cost at this point.
My question is, how do I record these payments so that my balance sheet is correct without affecting my bank accounts since there is no actual cash transaction? The money paid routinely for laboratory diagnostics is already recorded as a business expense.
Thank you!
Good day, drataj4.
You can record the points as a vendor credit. Then, use them as payments for the monthly lease. Here's how:
Then, to pay the monthly lease using the credit, follow these steps:
Check out the screenshots below for more details. You can also leave a comment below if you have follow-up questions.
The value is Income to you. That's how you apply it against the lease amount.
Thank you for the reply.
The problem that I have is that the loan is held through a different corporation/vendor. It is undoubtedly the preferred capital lender to this corporation (maybe even owned by the lab), but listed as a different vendor. How do I access the laboratory vendor credits to pay off a loan under a different corporation?
Thanks again!
Hello there, @drataj4.
Thank you for getting back to us and adding more details. I can share some insights about the recording process in QuickBooks Desktop.
You can set up and use a temporary clearing account to transfer available credits from one vendor to another. Next, create a journal entry to move the credit from the existing vendor to the clearing account:
Then, apply the credit to the Journal Entry created as an unpaid bill. Lastly, create a Journal Entry to move the credit from the clearing account to the vendor.
For detailed instruction, please refer to this article: Transfer and apply credit from one vendor to another.
That should get the credit appears on the vendor's account, drataj4.
Leave me a comment below if you have follow up questions. I'm always here to help you further. Wishing you all the best!
Please Learn from the input here. You Avoid using JE when Names are also needed. You avoid them for AP, AR, for QB inventory, for Sales, Sales taxes, and for QB Payroll. You just bypassed cash ve accrual basis, as well.
The Vendor Name as payee when you write the check to pay the lease or loan payment is Not meaningful to the Balance you are tracking as the Liability account. It's your reference, not your Balance.
Your Entry for Vendor Credit used to pay against the lease/loan can be like this:
Enter Bill. Date it for the date of the Loan Payment when the rewards got used. Enter on the first line the Liability account and amount as if this is making a loan payment. On the next line, enter the amount of the rewards points and this is Income, so use a Negative here.
Hit Recalc. You should have a $0 Bill. Use either vendor's name on the Purchased From; note the other vendor on the Income line or the loan line, as Memo.
If you want One Transaction per name, that still is never JE for AP. Like this:
Make a Clearing Bank. Enter a Vendor Credit for the vendor Giving you income, then make a Deposit with that name and "from" AP.In Pay Bills, link this credit to that "refund" which gives you Value to spend.
Now write the Loan Payment Check from the Clearing Bank to the lender name, as if that really was a banking event.
Clearing Bank = 0.
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