We collect payments from our customers for appraisals in advance and post them. Then when vendor sends the bill we pay from the payment made by customer. None Income.

I'm glad you brought this up in the Community, Tywilla.

Let's use a retainer or deposit for the advance payments from the customer in QuickBooks Online (QBO).

As an initial step, we'll want to create a liability account and use it to track the amount of the retainers you receive from customers. Here's how:

1. Go to the Gear icon, then select Chart of Accounts.
2. Select New.
3. From the Account Type drop-down menu, select Current Liabilities.
4. From the Detail Type drop-down menu, Client Trust Accounts - Liabilities.
5. Enter a name for the account (ex.  Trust Liabilities) or accept the suggested name. Then, select a Default GST Code, and enter a Balance and as of date.
   
6. Click Save and close.

After creating the liability account, create a retainer item. I'll show you the steps below:

1. Go to the Gear icon, then select Products and Services.
2. Select New.
3. From the Product/Service information panel, select Service.
   
4. Enter a name for the new product or service item (ex. Retainer).
5. From the Income account drop-down menu, select Trust Liability Account.
   
6. Select Save and close.

Once done, you can now use the retainer item when paying the vendor bills.

Here's how:

1. If you originally recorded a bill in QuickBooks, use Pay bills to close the bill.
2. Entering a bill payment through Pay bills ensures that the Vendor balance decreases appropriately.
3. Click Save and close.

You can check out this article for more information about paying bills: Learn the difference between bills, checks, and expenses in QuickBooks Online

I'll leave you with an article that provides complete information on different ways to handle upfront retainers or deposits in QBO. This explains every scenario that can be applicable to you. (Proceed to Step 3 onward) : Record a retainer or deposit.

Don't hesitate to get back to me if there's anything you need to record collected payments. I'm always here to help you some more.