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I have a customer who bought some inventory items on behalf of our company. We will enter these items into our inventory and wish to record the transaction in our QBO account. At the same time, I wish to give credit to the customer to the value of the items he bought on our behalf, and over time, deduct the amount owed to him when his future invoices become due.
How do I record these transactions in QBO? Should I receive a bill from the customer and then transfer the amount owed to him to his customer account? Or should I issue him a credit note?
Grateful for your advice.
With thanks.
Solved! Go to Solution.
Thank you for your advice. Having reviewed the suggested materials I have finally figured out how to record transactions for when a customer pays for inventory items on the company’s behalf and then recording the amount owed to him on a credit account to be applied against his future invoices.
The steps I tool are as follows:
This way, when the customer’s future invoices fall due, I can add a line / service item in his invoices to deduct the sums owed from his trust liability account and apply the appropriate prepaid amounts to his invoice to record them as being paid. I will repeat this process for all his future invoices until the amount he has on credit is cleared.
It's great to have you here in the Community, Stoatmonster. Let me share some steps to assist you in recording transactions paid by customers on Company's behalf in QuickBooks Online (QBO).
Yes, you can create a bill and mark it as paid, then you can issue a credit note to the value of items he bought on your behalf so they can use it to reduce the balance on their next invoice.
To enter the bill:
For more details and the steps to guide you to mark the bill paid, please refer to this article: Enter bills and record bill payments in QuickBooks Online.
If you're ready to create a credit note for the customer, see the steps below:
For further details about credit notes and delayed credit in QuickBooks, check out this article: Create and apply credit notes or delayed credits in QuickBooks Online. Also, you can turn off the option to Automatically apply credits from the Advanced tab in the Account and Settings.
I've also added these articles for future purposes:
Keep me posted with recording transactions in QBO or if you have any other QuickBooks-related concerns. I'll be glad to help you out. Take care always!
Thank you for your advice.
I have created a bill and listed the items purchased for entry into the inventory.
Should this be billable to the customer who bought it on our behalf from the vendor, or should I just enter the vendor's name?
How do I mark this bill as paid when the intention is to repay the customer for his expense by giving him credit of equal value on his future invoices?
Should I have the transactions run through a clearing a/c (e,g, undeposuted funds a/c)?
Please help to walk me through the steps?
With thanks.
Hi there, Stoatmonster.
A billable expense is an expense you incur on your customer's behalf when you perform work for them. In this case, it was the customer who paid for it on your behalf.
You can read more details about this here: Enter Billable Expenses.
For your second question, you can use mark the bill using the Bill Payment feature. Then close the invoice using a credit memo. Let me share these articles for additional details:
With regards to the last inquiry, I would recommend reaching out to your accountant for further advice on this matter. This is to make sure that all transactions are recorded properly with the right accounts.
The Community is always here if you need anything else.
Thank you for your advice. Having reviewed the suggested materials I have finally figured out how to record transactions for when a customer pays for inventory items on the company’s behalf and then recording the amount owed to him on a credit account to be applied against his future invoices.
The steps I tool are as follows:
This way, when the customer’s future invoices fall due, I can add a line / service item in his invoices to deduct the sums owed from his trust liability account and apply the appropriate prepaid amounts to his invoice to record them as being paid. I will repeat this process for all his future invoices until the amount he has on credit is cleared.
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