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C
Crouchie DC
May 30, 2020
Question

How do I Contra a debit card transaction against incoming funds

  • May 30, 2020
  • 1 reply
  • 0 views

Hi there

 

How do I deal with a debit card transaction which is an expense that is paid back to me?

 

This is the situation - I provide a service to a customer where I charge an hourly rate.  I invoice them at the end of every month for the hours I have provided.  Whilst doing work for them I sometimes use their van which I have to fill up with fuel afterward.  I do this using the debit card on my business account.  I then give them the receipts and they put the money back in my business account.  Just trying to work out how to contra this as it is neither my expense, nor is it income?

 

Just to confuse matters even more, last month they paid my invoice with a couple of these fuel receipts included in the same payment into my  business account - i.e part of the payment was for sales income and part of it for a couple of these fuel receipts. 

 

I just can't get my head around it!

 

Thanks in advance.

Dan

1 reply

R
Ryan_M
May 31, 2020

Hi @Crouchie DC,

 

I'll walk you through the steps on how to record a contra transaction in QuickBooks Online (QBO).

 

The first thing you need to do is create a bank account that will serve as a checking account.

 

Here's how:

 

  1. Highlight the Accounting tab.
  2. Select Chart of Accounts.
  3. Hit the New button.
  4. Set the Account Type to Bank, and Detail Type to Cash on hand.
  5. Enter the name of the account as you wish.
  6. The beginning balance should be 0.
  7. Tap Save and Close when done.

You can then record an invoice to be sent to your customer as normal. Enter the complete details, as well as the full amount. When you create a Receive payment transaction for it, ensure that the amount is deposited to the checking account created earlier. Next, create a bill or an expense to record the payment for your customer. Set the account where the payment will come from to the same checking account.

 

Please note, it would be best to consult your bookkeeper or accountant on how it would be best to enter these transactions in your books. 

 

If you have other questions, place them in the comments below. I'll get back to you as soon as I can. 

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