Construction Bonds

Kimberly74 · ‎March 25, 2024

I have a contractor client that has a job whereby he submits a draw request to the bonding company for payment to the subcontractors, himself and suppliers. What's the proper way to enter this into the books. I want to be able to keep track of all the expenses associated with this particular job within quickbooks and not have to do double enter into excel. For instance, I have been creating a bill in quickbooks desktop when an invoice comes in from a supplier, but how do I account for it being paid when the bonding company has actually paid it?

Rainflurry

@Kimberly74

Change the amount in the AMOUNT DUE box to $0 (it's $7,534.50) and you should be all set. The amount due on the bill needs to be $0 since the bonding company paid it.

View solution in original post

Kurt_M · ‎March 25, 2024

It's great to have you here in the Community space, @Kimberly74.

You may have posted the same question, and one of our colleagues was able to respond and provide a recommendation to it. We'll route you to her response to help you get through this and record it with your book inside QuickBooks Desktop (QBDT). Feel free to visit this page: https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/re-construction-draws/01/14...

Furthermore, here's an article to help you keep track of transactions you entered inside the program: Understand reports.

We look forward to having you here again if you need help managing contractors or transactions inside QuickBooks. As always, we'll respond and provide you with the details to address your questions. Keep safe and have a good one.

Rainflurry

@Kimberly74

Not sure if you determined the best way to record vendor bills when paid by the bonding company. If you still need some guidance, you can create an Other Current Liability (OCL) account called 'Due to Bonding Co.' and a service product called 'Paid by Bonding Co.'. When setting up the service product, select the newly-created Due to Bonding Co. (OCL) under 'Income Account'.

When you enter the vendor's bill, add a line item with the Paid by Bonding Co. service product and an amount equal to the total of the bill as a negative amount. That will create a $0 bill (it will show as paid), the expenses will be booked and the amount paid by the bonding company will be booked to the Due to Bonding Co. OCL account.

Kimberly74

Thank you Rainflurry!

However, I must be doing something incorrectly. I've set up the OCL account and the service item linked to the OCL account. However, when I enter the vendor bill, and try to choose an account under the expense tab, I receive a message that I have to use an expense or liability account. If I put the charge under the Item tab as a negative, it creates a charge under the expense tab as a positive and I receive a pop-up that I'm not in balance.

Rainflurry

@Kimberly74

Change the amount in the AMOUNT DUE box to $0 (it's $7,534.50) and you should be all set. The amount due on the bill needs to be $0 since the bonding company paid it.

Kimberly74

RainFlurry,

You are wonderful! Thank you so much!

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