How do I categorize Venmo payments in Quickbooks if they are used to pay a vendor or subcontractor? Everytime I change one payment it changes them all?

Venmo like paypal is just a service that transmit your money from one of your accounts to the vendor. It is not a credit card or liability just instant or nearly instant transfer.

So do not add venmo in your chart of accounts but as a payment method - like ACH. Record your payment within the bank account being used with reference as venmo.  If you cannot add the venmo fee in that payment transaction you can always record it separately 

I have a slightly different situation that I could not specifically find in the Community help. The business owner had a vendor initiate a Venmo transaction to the business credit card.  The Venmo history showed a correct payment of $440. You have to look further into the payment details to see that there was also a fee of $13.20. The full amount of $453.60 was posted to the credit card. In QBO the total amount was posted to Uncategorized Assets. I matched that amount to the Credit Card Register. But I cannot unmatch it and expense it to the correct category and vendor. Any suggestions?

Thank you!

Hi there, @ keynq.

You’ll first need to check the Venmo history to see if the transactions are correct. Then, manually match the transaction to your QuickBooks Online. I’ll guide you how.

1. Go to the Banking menu, then select the Banking tab.
2. On the For Review column, choose the correct transaction. 
3. Select a customer or vendor name from the Select Payee drop-down.
4. Check that the selection in the Category field is accurate, or choose a more specific Category.

Then, here’s how to manually match the transactions.

1. Click the transaction to expand the view.
2.  Review the Records found. These transactions are ones you already entered in QuickBooks.
3. Review the Deposit to field on the forms.
4. When you’re done, select Match.

Once done, you’ll need to record a Split for the fee. You may follow the steps below.

1. Select the left Banking menu and select Banking.
2. On the For Review tab, select a transaction to open it.
3. Select the Split button to open the Split Transaction window.
4. Select a Category and enter an Amount for each category to assign to the transaction until the total amount matches the downloaded amount. 
5. Select Save and Add.

For more details, you can also check this link:  Assign, categorize, edit, and add your downloaded banking transactions.

For future reference, you can open this link to learn more about reconciliation. 

Let me know if you need anything else. I would be happy to assist you. Have a great day!

Thank you, Charlene. The crux of my problem is that Quickbooks posted the transaction to A/P and as a transfer. Because it was already posted to the credit card account I matched it. Now I can't seem to get it out of A/P to post it to the correct vendor and category.  I'm sorry if I wasn't clear.

Allow me to chime in, @kevynq.

You can view the bank matches from the transaction by clicking the blue hyperlink within the transfer that says Online banking matches. You'll want to un-match the transfer and change the account type to the correct category and vendor. Then, you can follow the steps provided by my colleague @CharleneMaeF to match the transactions and split the fee from Venmo. You may also find this article about editing transactions helpful.

Feel free to comment below if you have any other questions. Best wishes!

I set Venmo up in COA when I began.  Based on your response (do not add venmo in your chart of accounts but as a payment method - like ACH. Record your payment within the bank account being used with reference as venmo)  How do I change from COA  and make corrections to previous transactions from Venmo to method of payments?  The transactions came over from bank as transfers. 

Hi @kpagaduan12,

I'll share insight on your query about online banking payments in QuickBooks Online(QBO).

You can use a journal entry to transfer the transactions you saved from the account in question to the correct bank account. As for the specific accounts to use for the journal entry, I suggest you consult with your bookkeeper or accountant on the best way to proceed. 

As for moving certain amounts from one bank account to another, see this article: Transfer funds between accounts. 

In case you have other questions about online banking in QBO, post them below. I'll get back to you as soon as I can. 

I use venmo as an option for customers pay invoices, I then transfer the funds in a lump sum to a business checking account.

I see you are suggesting not to add into the chart of accounts but then how would you suggest recording payments to the invoices and transfers from 1 account to the other?

Thanks

Hi, creekside21219!

Thank you for reaching out to the Community! With regards to your concern, there’s no need to create the journal entry to record a payment from Venmo to the other account. Here are the following steps that you can do. 

1. You may receive payment using the Venmo payment method.
2. Deposit it first to Undeposited Funds, since it's a lump sum transaction from Venmo to the actual bank.
3. Once it's deposited to the actual bank, you can then create a bank deposit in QBO using the funds from Undeposited Funds. Then, you can include the fee.

You may also check on check this article for future reference:
Transfer funds between accounts.

 Please do get back on this thread if you need further assistance in managing your payments using Venmo. I’m always here to help you.

Still struggling on this one.  A client is pushing payments to vendors and receipts from clients through Venmo.  Dropping all of these transactions into Undeposited Funds (which all of these transactions aren't truly of that nature) really clouds that account.  The Venmo reload draft or gross receipt pushed to the actual bank account only occurs once or twice a month.  Seems it would be simpler to create the Venmo account as another bank account in the COA.

I'm having a similar problem.
Client is using venmo as a bank. Taking deposits and making payments from it, most of which do not go through her bank accounts at all. Although sometimes she transfers the funds to her bank account, and sometimes a venmo payment comes out of a bank account, but most of the time the in and out is in venmo alone  I set it up in COA, but am perplexed as how to keep track, and balancing venmo seems impossible. 

I was thinking of assigning an account number for transfer, for when it shows up in a bank account AND venmo, to show the flow-through, but now wonder if the actual cost should be itemized in venmo or the bank. Argh.

Welcome to the thread, @JENNILUNA13.

Venmo is a portal like Paypal use to pay expenses and receive money. As mentioned by @john-pero, you don't need to add Vendo to your Chart of Accounts (COA) but as a payment method. 

So when receiving a payment, you can create a bank deposit to record it. And write a check or expense for money out transactions, then set Venmo as the payment method. For more details about this process, see these articles:

• How to Record Bank Deposits in QuickBooks Online
• Enter and manage expenses in QuickBooks Online

In your case, since you've set up Vendo on your COA, you can follow the suggested workaround provided by my colleague @Ryan_M, which is to create a journal entry to transfer the transaction. Then, consult your account on which account receives the debit or credit. This to ensure the correct posting of your books.

If you have any other questions or concerns in managing your transactions, let me know by commenting below. I want to make sure everything is taken care of for you. Have a great day.

I actually think the best way IS to connect Venmo to the COA using online banking. While Venmo is a payment method, it's also very much a bank account.

Hear me out: Download transactions from your bank and from Venmo. Record the income and expenses as normal against the Venmo account, as if it it were a bank account. Payments made through Venmo but deducted from your bank would be recorded as transfers to your Venmo balance (simple by way of Rule), and since they are recorded on both the bank side and the Venmo side, they balance. Cashouts from Venmo to your bank are recorded as transfers to your bank. You do have to pick a good starting point in terms of your "opening balance" in Venmo, but other than that, it's pretty simple and--dare I say--kind of great. I'm sure some expert will tell me I'm wrong, but it's working for me!

I am an expert at this - I would make this super simple and create sales income from the different POS transactions:

i.e.
Under Sales Income I would create sub accts as such:

The word Transfer used - when a POS transfers funds - can be confusing.  But you have to remember the word and think how they are using it.  When I see transfer - I know that it should be an add not a transfer - and you can create a rule for such.  

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@SOTU wrote:

I actually think the best way IS to connect Venmo to the COA using online banking. While Venmo is a payment method, it's also very much a bank account.

 

Hear me out: Download transactions from your bank and from Venmo. Record the income and expenses as normal against the Venmo account, as if it it were a bank account. Payments made through Venmo but deducted from your bank would be recorded as transfers to your Venmo balance (simple by way of Rule), and since they are recorded on both the bank side and the Venmo side, they balance. Cashouts from Venmo to your bank are recorded as transfers to your bank. You do have to pick a good starting point in terms of your "opening balance" in Venmo, but other than that, it's pretty simple and--dare I say--kind of great. I'm sure some expert will tell me I'm wrong, but it's working for me!

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     *   Paypal Sales (when you receive a transfer from a sale paid by paypal)

     *   Venmo Sales (when you receive a transfer from Venmo - paid via Venmo)

     *   Stripe Sales (when you receive a payment from someone who paid via stripe)

If you set up a separate bank acct - you are doubling up on your income possibly.  

If you using an outside POS - your sales transactions report come from that outside sales service.  The transactions may or may not sync with QBO - it depends on the way you choose to set it up.  

I would create a vendor called Paypal Vendor - since paying with pay pal does not give you much details other than a date and an amount.

Then you would put those to uncategorized transactions.  As you will need to complete all the details for who you actually paid and what it was for:  You can then export that list of transactions that need further detail - get that information and update those transactions with correct info.

So Paypal Vendor - would then be changed to Joe Schmoe - For supplies

"Payments made through Venmo but deducted from your bank would be recorded as transfers to your Venmo balance (simple by way of Rule), " 

Have taken over bookkeeping for an NGO and trying to understand how to enter Venmo transactions properly. I understand the money coming in (deposits) but don't understand the payments. Can you give me an example of a payment made from Venmo which shows as a debit in the checking account? Want to be able to keep Venmo reconciled/balanced going forward. (New to Venmo)

I'm here to help share details about your transaction, @Gogo2.

You can create an expense or write a check to show a payment made through Venmo. Such entries will show the transaction as a debit to the checking account used.

Here are the links to use and learn more about each entry:

• Enter and Manage Expenses in QuickBooks Online
• Create and record Checks in QuickBooks Online

You may also read all related references in this article to make sure your account register matches your bank and credit card statements: Use this Guide Anytime you need Help Doing or Fixing a Reconciliation.

If you have any other clarifications or follow-up questions about bank transactions, please let me know by adding a comment below. I'll be here to lend a hand. Stay safe!

Quickbooks process for creating 1099-MISC states: "The IRS requires you to exclude from 1099 forms any payments you make by credit card, debit card, gift card, or Paypal. Review included and excluded payments to see all the payments you made to the selected vendors."   I understand that Venmo is essentially the same thing as Paypal, does this mean that a 1099 vendor that I have always paid with Venmo, will not get a 1099-MISC?

Help has arrived, @CPT1. I’d be glad to help you fix this issue about creating 1099s in QuickBooks Online.

For vendor payments made using a third-party money transfer service, you don't need to file 1099 in QuickBooks Online. Venmo, Cashapp, and Zelle can all help you file 1099s. That said, I suggest reaching out to them for further assistance in completing these forms.

Here's an article you can refer to for more details on:  IRS Reporting Requirements for Third-party Vendor Payments on 1099-K/1099-MISC. 

To know more on how you can handle 1099s in QBO, check this out:

• Create and file 1099s using QuickBooks Online.
• Modify your chart of accounts for your 1099-MISC and 1099-NEC filing.

 
If you have any further questions or concerns about 1099 in QBO, please know that you can always tag my name. I'm here to help you in any way I can. Enjoy your day! 

I am having a tough time with Venmo. I agree that it makes sense that Venmo should be in the COA, but it will not reconcile to the Venmo statement. Have you had issues with this and if so, how do you/did you resolve? 

Thank you for posting your concern here in the Community, @CACcpa.

I'd love to help you with your concern about reconciling your Venmo account in QuickBooks Online (QBO). But can you please provide more information about it? Is your Venmo account connected to QBO? Any additional information would be greatly appreciated.

The Community forum is always open to help you with any QuickBooks concerns. Have a good one!

Thanks for responding. I don't have a problem reconciling it but it's all manual. Yes, Venmo is connected to QBO. Is there any way to download the activity from Venmo online to the client's Venmo account in QBO? I have it set up as a Bank Account.  The payments out are being categorized and the the client's transfers to her checking account are catgorized as Transfers.

Thanks for your help.

Hi kevynq,

Venmo is treated like a bank, so only the posted transactions are downloaded to QuickBooks, not other activities. You'll have to manually enter them in QuickBooks. However, please be sure to not inflate your income or expenses. If you're okay with just having downloaded transactions, just leave your setup up as is.

Feel free to go back to this thread if you have other questions in mind.

Hey! I am trying to fully understand yours as well as others' responses on here. I too have a similar problem of duplicate transactions, but they are from paying my contractors through Venmo.

Is there a way in order to offset having my Venmo account integrated with Quickbooks to where it does not have a duplicate entry, once in my bank account and once through my Venmo account? Or is there a way to merge this duplicate transactions?