How do i receive a payment, take out our fee, and send remainder funds to client? Please HELP!!

Yes, you can record it in the system as an expense transaction, @Jenny2424.

After invoicing the customer and receiving their payment, you can either create Bill, Expense or a Check. Creating these types of events lets you track expenses, and help organize your account and bank statement reconciliation in the future.

Since you mailed the amount in a form of a check, you can use the Check function itself. Let me breakdown the steps for you:

1. Select the +New button.
2. Choose Check.
   
3. Enter the needed information in each field, including the Check no.
4. Press the Save and close.
   

You can use this reference to track your expenses in QuickBooks Online. It includes details about assessing personal finances and using a budget to increase profits.

I’ll be around if you have other concerns with QuickBooks. Have a great day.

Hi @MadelynC:

I have a similar case and have been wondering whether the approach that I'm about to describe is a valid one.  

We invoice our client for fees which include amounts for sub-contractors.  After receiving the client's payment as a direct deposit in the bank account, we have to identify the amount for the sub-contractors separately, which has to be paid when we receive their invoices.  Based on this scenario, do we create a liability account (current) and use a journal entry to transfer the amount owed to the sub-contractors from the bank account to this liability account?  Or, do we create a bill (preliminary) for each sub-contractor for their respective amount until an invoice is received?  The bills, as they are outstanding, would be recorded as A/P. Which approach do you think would work best to manage these payments? Thank you.

Hi Madelyn,

Im very confused about the process.

This is where I'm stuck.

I made a contract with a client to file a claim on their behalf. The check will come directly to me. Once i get the funds, it will be deposited into my bank account. Once funds clear i will then take my fee and cut him a check for the remainder. For example if the claim is 1500.00 and my fee is $500. I will cut him a check for $1000.00 and mail it to him

I complete an invoice for $500.00 and send it to him. How do i categorized the payment of $1000 to the client. As a vendor? Does that mean i have to also 1099 him at the end of the year?

My concern is i dont want the IRS thinking i made all of $1500 since the funds came to my account. How do inter it to show i only made $500 and the rest was sent to the client? Apologize if im not making any sense.