Is there a way to fix this? Employee paid for material out of pocket. Customer paid with a check. How do I record this to make sure everything is reconciled?

Hello, jjheatinc.

I'll lay down a guide or two and ensure you'll be able to record the employee's out-of-pocket material purchase and the customer payment. 

Yes, and we'll want to tackle the employee's payment first. Since they paid something out of their pocket, there are two ways to handle this. 

We can use a journal entry if we want to pay the employee at a later time, or use a check if we want to pay them now. 

If you want to opt for a journal entry, create a liability account first since we will be using it to track the amount. Then, record the journal entry: 

1. Click the + New button, then select Journal entry. 
2. On the first line, select the liability account you created then enter the amount under Credits
3. For the second line, add the expense account (the employee's material purchase) and enter the same amount under Debits. 
4. Under the Name column, add your employee's profile. 
5. Enter other important information such as memo or journal entry number.
6. Once done, click Save and close. 

If you want to pay your employee now, use a check by clicking on the + New button then selecting Check. We can use the liability account to track the amounts. 

We can also use this option to pay your employee from the journal entry we created. 

We can take a look at this article if you need more details about managing your employee's business-related expenses: Reimburse an employee. 

In regards to the customer payment, are you trying to record their invoice payment (or a sales receipt) from the goods they rendered? More details would definitely help me come up with a solution in recording this. 

In the meantime if you have a customer invoice, we can record the payment by clicking the + New button, then selecting Receive payment. Make sure to select Check as the Payment method.

If they paid on the spot and you haven't record any sales form for them yet, create a sales receipt by clicking on the + New button, then selecting Sales receipt. 

I'll also point out that we can connect the employee's transaction with your customer's invoice or sales receipt. All we need to do is to enter a billable transaction when recording the employee's purchase. 

We can refer to this article if you need a guide or two about the Billable feature: Enter billable expenses. 

Need to check on your reports to see your current expenses and sales? Let's take a look at this article for a guide on how to run basic reports: Run reports in QuickBooks Online. 

Would you like some assistance in recording other employee or customer entries? Or do you have other questions in managing your data like running reports and such? Let me know and I'll gladly help you out.