Customer Installment Payments against a Vendor payment

Isaiah58Financial · ‎November 30, 2019

Hello,

I paid a vendor for something that is billable to my customer - total amount is $12K. The customer is going to pay us back in monthly equal payments/installments over two years.

Normally I would click on "billable" in the vendor payment and the total amount would show as ONE total invoice for 12K. But this situation is unique for us in that the 12K is owed us in total but we are going to collect $500 every month for 2 years and I want to track that customer is paying us on time each month, and if not, be able to utilize the QB reports to show what portion of the $12K is past due if the customer has missed a couple of months of payments.

1) What is the best way to show the customer owes us the 12K from that vendor payment that I made so that monthly installments can be made against it?

2) How do I setup that the total 12K is owed us as monthly $500 payments at the beginning of each month so that I can keep track of total owed and know if the customer is late in paying us?

Thank you

Rustler · ‎December 01, 2019

@QBsguru wrote:

The issue with linking a charge with an billable customer is that if the charge is not set up as a two sided item, your revenue will negate your expense account instead of showing an expense and revenue.

By this I mean, if you used an expense account for the vendor bill and marked it billable, it will zero out. You have to use the item tab of the bill.

When you turn on billable expenses, you should IMO check mark that income is tracked as income and assign the income account for it to post to. That allows the use of an expense account marked as billable and the billable expense income to post separately.

Double sided items can certainly be used too.

View solution in original post

QBsguru · ‎November 30, 2019

Under Preferences: Jobs and estimates, make sure estimates and progressive invoices are toggled "yes". Create an estimate for the full $12K. This is a non-posting transaction. From the estimate, click on the create invoice button. Select the bottom option to create an invoice for separate item/amount. Enter $500. Save. Continue until you have created 24 invoices, each for $500 dated one each month. This will show in your A/R total and open invoice report. When running the open invoice report, you will need to customize, use the Advanced tab and select "as of report date".

Isaiah58Financial · ‎November 30, 2019

Thank you for replying.

How do I tie the Vendor bill for the $12K that I clicked as billable to this suggested solution?

Rustler · ‎November 30, 2019

The solution @QBsguru provided works well but remember that 12K can not be part of the customer invoice you create for what ever work/products were involved over and above this amount, if any.

As long as you file your taxes on a cash basis, and you remember to do your financial reporting on a cash basis, this works fine. But it does not work in accrual basis. In accrual basis you only create the invoice from the estimate each month, not ahead of time.

QBsguru · ‎November 30, 2019

In this instance, you cannot by creating an estimate. If you really want to link the charge to the invoice, you would have to create an invoice for the full charge and enter a charge as a negative so that invoice total is $500 then create the remaining invoices.

The issue with linking a charge with an billable customer is that if the charge is not set up as a two sided item, your revenue will negate your expense account instead of showing an expense and revenue.

By this I mean, if you used an expense account for the vendor bill and marked it billable, it will zero out. You have to use the item tab of the bill.

Rustler · ‎December 01, 2019

@QBsguru wrote:

The issue with linking a charge with an billable customer is that if the charge is not set up as a two sided item, your revenue will negate your expense account instead of showing an expense and revenue.

By this I mean, if you used an expense account for the vendor bill and marked it billable, it will zero out. You have to use the item tab of the bill.

When you turn on billable expenses, you should IMO check mark that income is tracked as income and assign the income account for it to post to. That allows the use of an expense account marked as billable and the billable expense income to post separately.

Double sided items can certainly be used too.

Isaiah58Financial · ‎December 03, 2019

Thank you for weighing in - appreciate your insight

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Customer Installment Payments against a Vendor payment