How to enter sales/revenue in QuickBooks online when deposits include monies that have to be paid out

You will need to setup an liability account for the $800 you owe the customer.  Setup the liability account as 

> Other Current Liabilities

> Tax form section >Other Current Liabilities

and name the account the customer you owe money too.  Then split the $1,000 transaction like this.

$800 to (your new liability account to the customer)

$200 to your income account

Then when you pay the customer $800 from your checking code it to that liability account, that will give you a 0 balance for that account on the balance sheet.

Thank you. The challenge is that we don’t know the income amount until the end of the month. For example we collect different amounts daily. But at the end of the amount I am told $2000 is income. How do record it

@newbie4040 

Record all of the deposits to the liability account.  Then, at month-end, when you know the allocation, create a journal entry: debit (reduce) the liability account for the amount that is income to you and credit income.  Then, pay your customers from the liability account.

Hi,

I just started working on this. Whoever set this up initially at the end of 2021 seems to have made mistakes.

So the way they set it up is as follows:

1. Created Asset account 

2. When funds get deposited in Checking Account,  they do a transfer of that amount to the Asset account which goes negative

3. When funds get plaid out of the checking account, they do a transfer out of the Asset Account to the Checking Account (which appears as a payment in checking account)

4. The Asset account has been slowing increasing and has a negative balance. Some of it is the earned income that has not been recognized every month. The other part is funds that need to be paid out.

There are so many transactions in Asset account since end of 2021 and I do not want to go back and move them to a liability account.

What transaction should I create in this asset account to recognize the revenue amount every month.

I am so stressed on how to fix this.