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CraigWatson
March 5, 2019
Solved

Create an account in the chart of accounts for a payment I take and send out on the customers behalf.

  • March 5, 2019
  • 1 reply
  • 0 views

Hi,

 

On my invoices there is often a "Council Fee", this is a payment that is made to the relevant council as part of an application process for the work the customer has asked me to undertake.

 

I add the exact amount to the invoice and I pay the amount from our bank to the council when the application is complete.

 

I am wondering how best to categorise this form of payment in the chart of accounts, then I can create a service for this when creating the invoice.

 

Thanks

Craig

Best answer by JamesC

Hi CraigWatson,

 

Welcome to the UK Community Page for QuickBooks Online. Rustler is very correct in his advice.

 

For the payments being Non VAT applicable on the invoice, you just need to make sure you mark that element of the invoice as "No VAT" in the VAT Column. I'll expect this will be a multi line invoice.

 

Once the accountant has clarified the best way for you to move forwards, we can help you to implement it in the best manner in your QuickBooks.

 

Thanks,

1 reply

Rustler
Rustler
March 5, 2019

Two schools of thought on this one, and since you are in the UK, it would be best to ask a tax accountant

 

1. what the customer pays you is income, what you pay is expense, if they are the same they cancel each other on the P&L

 

or

 

2 book the customer payment to a liability account, then make the payment using that same liabilty account as the expense (reason) for the payment

    C
    CraigWatsonAuthor
    March 5, 2019

    Thanks, I appreciate your reply.

     

    I suppose I could simply create an income account as "Fees Taken" and an expense account as "Fees Paid".

     

    However, these payments are not VAT applicable on the invoice which adds another layer of complexity for a novice like me so I will get some further advice from a local accountant.

     

    Thanks again!

    JamesC
    JamesCAnswer
    March 5, 2019

    Hi CraigWatson,

     

    Welcome to the UK Community Page for QuickBooks Online. Rustler is very correct in his advice.

     

    For the payments being Non VAT applicable on the invoice, you just need to make sure you mark that element of the invoice as "No VAT" in the VAT Column. I'll expect this will be a multi line invoice.

     

    Once the accountant has clarified the best way for you to move forwards, we can help you to implement it in the best manner in your QuickBooks.

     

    Thanks,

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