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JL386
October 16, 2022
Question

Charges for 1099 contractors

  • October 16, 2022
  • 1 reply
  • 0 views

We have a real estate brokerage where the agents are treated as 1099 independent contractors.  I have every agent setup as a vendor.  My question is while most of the money is outgoing to the agents there are expenses, we charge to them.  Some are expenses that we incur and get reimbursed from them while others are monthly charges or charges related to each sales transaction. So, for instance we will purchase their business cards and real estate signs and then they reimburse us.   Here are some examples other items we charge them for that are not reimbursements. If they want desk space in the office they can rent them on a monthly basis, and we charge E&O insurance and brokerage splits on each transaction.  My question is how to properly set up those charges and keep them associated with the vendor since invoicing and billable expenses seem to on only be associated with customers. We want to be able to issue those charges to them in a monthly statement and then if there has not been a payment made before they close of one of their sales then we want to deduct those charges from their commission checks and itemize them on their check stub.  Is there a way to do that? If not, what is the suggested work around.

1 reply

KlentB
KlentB
October 17, 2022

Hi there, JL386.

 

I can share some tips in handling that transaction.

 

In QuickBooks Desktop, we're unable to directly charge your vendor or contractor. You may need to add them as a customer so you can issue an invoice to them. Since you can’t have the same name in both lists, make one of the names slightly different. Here's how:

 

  1. Go to the Customers menu.
  2. Select Customer Center
  3. From the New Customer & Job drop-down menu, choose New Customer.
  4. Enter the necessary information, then click OK.

After that, you'll have to set up a trade-clearing account:

 

  1. Go to the List menu. then select Chart of accounts.
  2. From the Account drop-down menu, select New.
  3. Under the Account Type ▼ dropdown, select Bank.
  4. Enter the account name. 
  5. Select Save and Close.

Once done, you can now enter an invoice for services or items they procure. Then, receive the payment to the clearing account once they pay. Next, enter the bill/bill payment or commission check into the clearing account.

 

Fill me in if you need more help in managing your contractors. Have a good one.

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