Quickbooks has been aware of this issue for years -- either they CAN'T fix it (but will continue to take our money as if they are providing us with a fully functioning product) or they WON'T.  Either way, we're stuck with their cumbersome and idiotic workarounds in the meantime.  Despicable!

My work around has been entering "Name (C)" and "Name (V)" but it is very confusing to the older generation that is not comfortable with quickbooks to begin with.  I have to go back in and change names constantly so my reports make sense.  It is a giant pain.

This would SOOOO confuse my accountant.  It doesnt need to be this complicated.

I use "Name (c)" and "Name (v)".  It is not perfect, but it is consistent.  It is better than trying to remember if you put the llc or the inc on the customer or vender one.  I used to just add a period to the end of the vendor accounts but then I couldn't remember which was which. 

I appreciate you for sharing a workaround, @SellLumber.

This can help other users who are also having this issue. I understand how this feature is beneficial to your business and to other users.

As my colleague stated above, this feature request is already sent to our product engineers. While we can't provide a specific time frame on when this feature will roll out. You can always visit our Product Updates page to know about our latest feature releases.

Also, I've got you this article for reference in case you want to refund a credit card payments: Void or Refund Credit Card Payments in QuickBooks Desktop.

As always, don't hesitate to leave a comment below if you have any other concerns. We're always here to help.

We've been hearing the "request to our product engineers" excuse for years now.  I'm beginning to suspect that's not ever going to happen!

Do you mind sharing what your workaround is, in detail? This is so aggravating! I have a customer that sends a check to pay their invoices with deductions for invoices we owe them... this takes WAY too much time to try and keep up with.

Hi there, @SB719.

The check that you receive can be recorded using the barter process. You'll need to add him as a vendor (for the bill) and customer (for the invoice). Since you can’t have the same name in both lists, make one of the names slightly different.

After that, set up a barter bank account that will handle your transactions. To give you complete details about this process and on what are the steps to take, please see this link: Recording a barter transaction

Please know that I'm just a reply away if you have any other questions about this or with QuickBooks. I'll make sure you're all set. Have a good one!

I have been doing the barter system for years -- it works great.  Just create "bank accounts" for the entity... then pay or receive payments out this account.  Note that the balance of the bank account must always be zero when you are done.  If your customer has a positive balance, then they owe you money.  If your vendor has a positive balance, then you owe them money.

Example:  ABC Corp buys a service from us, but also sells us inventory.  We bill them from ABC Corp Customer profile and receive bills from them under ABC Corp Vendor profile... every month, we enter bills from them under the vendor tab... and we invoice them under the customer tab.  This month, the customer used $1000 of service from us and the vendor supplied us with $300 of goods.  We create an invoice for the customer and create a bill for the vendor.  We can easily see they owe us $700.  We create a bank account called ABC Corp Barter (just one time and use the same account every month).  And we create a payment type of Barter.  Then we receive a $300 payment for the customer using the barter payment type and deposit it directly into the ABC Corp Barter account and we pay the bill of $300 from the ABC Corp Barter account... now the Barter account balance is zero, the vendor bill has been paid and the customer shows a $300 credit.  Now we just send the invoice to the customer showing that the balance due is $700.

It sounds complex, but it is really easy after you set it up.  And the Customer Statement works great to show the payments.  Just make sure you use all memo fields to note what you are doing -- its surprising how memo fields make it to reports and these little explanations are very useful to remember what you did and to help your client understand how payments were applied.

Yeah, I do.

The people are trust most, like say the best IT guy out there, looks to me for design services. We both respect each other and understand the value it the other's skills. I am his customer for IT, and he buys design services from me. It is unfortunate that billing with him is so difficult.

If my customers will be now a vendor, and he has a balance, how can I record his bill as a vendor and deduct his balance left from being a customer?

Greetings, @ysr.

I can guide you in adding your customer as a vendor. Then, you can create a bill

Here's how:

1. Go to the Expenses menu.
2. Select the Vendors tab.
3. Click the New Vendor button.
4. Enter the vendor's information
5. Make sure to use the format to "last, first" in the Display name as field.
6. Select Save and close.

Once completed, you can create a clearing account. You can record the customers' balance on it.  Here's how:

1. Go to the Accounting menu.
2. Select the Chart of Accounts tab.
3. On the Chart of Accounts screen, click the New tab.
4. Choose Bank for the Account Type. You may choose any detail type you want for your clearing account.
5. Type in the Name for the clearing account.
6. Make sure you do not type in any amount on the balance before clicking Save and Close.

Now, you can create a bill then use the same clearing account in paying the bill. 

Lastly, I've added these articles to help you with managing your income and expense transactions:

• How to enter outstanding balances for customers and vendors
• Resolve common issues when applying a payment towards an invoice

Keep me posted if you have other questions. I'll be here should you need anything else. Have a good day.

I have the same issue as dqmiller -- we have congregations that are both donors and vendors.  This happens rather frequently.  How are we to differentiate between the two -- just use a slightly different name for donor vs vendor?  I am assuming that we also need to ensure that their legal name prints correctly on any checks we process to them.

This is disappointing to me as well. We have lots of local businesses in and related to our industry, and therefore both buy from and sell to them. I hope Quickbooks creates a way to allow someone or their business to be both a customer and a vendor very soon!

Did you get a valid answer yet, as I am in the same situation and have no clue what I can do? Thanks!

They told me it could not be done.  I had to make it inactive and create a vendor.  You can also add them as a vendor without making the customer inactive by adding a middle initial. 

I have done as someone has suggested above... Created two profiles. I put (Name) C for when they purchase services from us, and (Name) V for when we purchase services from them. It is somewhat frustrating, but at least if I search the name I can view both profiles easily.

As far as I know, QB has not addressed a fix for this.  I ended up naming the client as just their main name, and as a vendor, included the Inc. at the end.  So they are the same entity, but I had to change the names a bit for QB to allow it.  Still not accurate.  Still paying hundreds of dollars each year for software that doesn't do half of what their old desktop version did for a one-time cost of $300.  Intuit is just plain scammy.

Well it's May 2022 and apparently this thread was never deemed important enough to address.  Given the fact that in my law practice I have at times been both a client and vendor due to different roles I take in estates I manage, this has caused major problems.  

But hey, why makes things user friendly and work in a logical manner the average consumer can understand and use.  

I am of the opinion Quickbooks exists in its current fashion to make the entire process so fundamentally frustrating for the consumer that they hire an accountant. So that way Intuit gets a fee from the consumer and another from the accountant, and if this hampers and burdens the small business owner for the benefit of the big corporate giant - then so be it.

Hi there, @jtmarshall.

This feature appears to be beneficial to your company. I'm here to help you figure out how to submit feedback on this QuickBooks product feature.

Changing customer to a vendor automatically is currently unavailable in QuickBooks online. However, here's how we can send suggestions:

Here's how:

1. Select the Gear icon.

2. Select the type of feedback in the box.

3. Click the Next button to submit.

Your suggestion will be sent directly to our developers, who will take special consideration when creating future QuickBooks features.

You may track the status of your summited feedback on our QuickBooks Online Features Requests page.

The only solution is to deactivate the customer and manually enter the vendor in QuickBooks Online.

Here's how:

1. In the left navigation menu, select Sales.
2. Navigate to the Vendors section.
3. Then select New Vendor.
4. Fill in the required vendor information.
5. Save the file.

Additionally, visit this article on how to inactivate a customer: Delete a customer in QuickBooks Online.

If you have any more queries managing your vendors, please post them here. I'd be delighted to assist you more.

I do have customers who are also a donor and it is very frustrating as I am not able to categorize their donations as a donor...it's September 2022 and this concern has already been circulating here for couple of years and it still is not offered. Frustrating. 

It's been 3 years since this post was made and it still isn't fixed

How do the transactions work then?  If I mistakenly made someone a customer instead of a vendor - and need to 1099 them?  How do I do this?

Let me help you create a vendor profile in QuickBooks Online (QBO), 

We can delete (make inactive) the customer and recreate them again as a vendor. Before we proceed, consider editing the customer's name first before we delete them, because QBO doesn't allow duplicate names. Here's how:

1. Go to the Sales menu at the left pane, then Customers.
2. Select the Customer's name to open their information.
3. Go to the Customer Details tab, then click Edit.
4. Edit the name, then click Make inactive and Save.

Once done, recreate them again as a vendor. Here's how:

1. Got the Expenses tab at the left pane, then Vendors.
2. Click Add a vendor, then enter the necessary information.
3. Hit Save.

Then we can create a clearing account to help you properly record your barter transactions. This transfers funds from one customer or vendor to another. To create a clearing account:

1. Go to the Lists menu at the top.
2. Select Chart of Accounts.
3. Click the Accounts drop-down, then choose New.
4. Mark the Bank radio button in the Add New Account window.
5. Click Continue.
6. Type in the appropriate account name in the Account Name field. For example, clearing, barter, or wash accounts.
7. Fill in the necessary fields and leave the opening balance box blank.
8. Click Save & Close.

Once done, use this barter account to record the transactions. You can go through the steps under To use a clearing account section in this article: Set Up Clearing Account. I also suggest consulting your accountant for guidance on which account to use for debits and credits to ensure your transactions are properly tracked in the program. 

Keep me posted on how everything goes after following these steps. I'll be here should you need anything else.