cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Anonymous
Not applicable

Recording Payments made by outside source-Construction

The title company we are working with will be issuing the final retainage payments directly to our vendors. I need to record the retainage in out QB to get it into the job cost and I know I need to use an in/out type of bank account to record the transactions but just not finding details on how specifically to do this. Do I set up the 'dummy' bank account and just record manual checks against it and record the deposit for the total (so that is basically zeros out)? Or should I enter regular bills and 'pay' the bills from the 'dummy' bank?

 

Thanks in advance!!

3 Comments
Highlighted
Moderator

Recording Payments made by outside source-Construction

Great to see you here in the Community, RHS_GC.

I'd be happy to provide you with the step-by-step process on how to record retainage payments in QuickBooks Desktop.

 

You set up a Clearing Account and use this account to move money from one account to another account when you cannot move the money directly.

 

Here's how:

  1. From the Listsmenu, select Chart of Accounts.
  2. Right-click anywhere in the Chart of Accounts, then select New.
  3. In the Add New Account window, select the Bank radio button.
    Note: While you can choose from several types of accounts, the best is a bank account because of the following reasons:
    • You can pay into a bank account via Receive Payments or Make Deposits.
    • You can pay out of a bank account via Write Checks or Pay Bills.
    • A bank account appears on the balance sheet and on the statement of cash flows to balances and changes in balances.
    • To allocate expenses to overhead or class using a zero check, you must use a bank account as your Clearing account.
  4. Select Continue.
  5. In the Account Name field, enter Clearing AccountBarter Account or Wash Account.
  6. Do NOT enter an opening balance.
  7. Click Save & Close.

For more details, you can check this recommended article: Set up a clearing account.

 

Feel free to post back here in the Community, if you need anything else. Have a great day.

Highlighted
Anonymous
Not applicable

Recording Payments made by outside source-Construction

Perfect .. now how do I actually record the retainage payments that the Title Company is paying directly to my vendors so that I can show it in job cost?

Highlighted
QuickBooks Team

Recording Payments made by outside source-Construction

Welcome back to the Community, RHS_GC.

 

I can help track the retainage payments in QuickBooks.


You can record the payment as a billable expense, and then add them into the invoice so they’ll show in your job cost. I'll provide you the detailed instructions.

 

To create a bill:

  1. Go to Vendors at the top menu bar, then select Enter Bills.
  2. Click the Vendor drop-down arrow, then choose a vendor.
  3. Select the correct date and enter the amount of the bill.
  4. Click on the Expenses tab and enter the appropriate account.
  5. Make sure to select the customer/job.
  6. Click on Save & Save.

After creating the expense for the customer and marking it as billable, the next thing to do is add the billable expense to the invoice. To create an invoice, please follow these steps:

 

  1. Go to Customers at the top menu bar.
  2. Select Create Invoices.
  3. Enter the appropriate customer/job.
  4. In the Billable Time/Costs window, mark the radio button for Select the outstanding billable time and costs to add to this invoice?
  5. Choose OK, and go to the Expenses tab.
  6. Then select the expense transaction, and click on OK.


Next, receive the payments and track it to the clearing account. You can go to Customer at the top menu bar, and select Customer Payment.
From there, select the amount. Once done, click on Save & Close.

 

With the resolution steps I provided, the payments should now  recorded easily in your account.

 

If there's anything else that I can help find in QuickBooks, reach out back to me. I'll be happy to assist you further. Wishing you the best.

Need to get in touch?

Contact us