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BMulholland
February 27, 2025
Question

Vendor not Client, that is the Issue!

  • February 27, 2025
  • 1 reply
  • 0 views

I own an Employee Relocation Company. As part of the relocation process, we collect referral fees from realtors when a relocating employee buys or sells a home. (This is our largest revenue source).

 

Realtors are technically vendors, but in our industry the pay us (for sending them leads. these are called "referral fees"), instead of us paying them in a traditional vendor relationship.

 

In our current QB set up we have the real estate brokerages (like Coldwell Banker) set up as client (because they are who owe us the payment on the invoice we create in our system, to track the referral fees due to us, due at closing).

 

The "client" is really the company that we have a contract with (like Amazon, not the realtor, Coldwell Banker...) The customer (in our world) is the transferee (Mr. Smith). Coldwell Banker is really a vendor (but they are paying us)....

 

The issue we have created is we can't track all of the revenue we are making on the client account (i.e. "How much do we make on the Amazon contract?"). The other services like shipping household goods, temp housing etc are all more straightforward in a traditional vendor relationship. But referral fees from realtors are throwing us through a loop...

 

How do we: 1) Create an invoice (to track referral fees due) 2) Have it show under the client account (Amazon) but not on an AR Aging Report (as Amazon doesn't owe us the money....) 3) at the same time - we also need to track how much money each brokerage pays us....

 

Do we show as a negative payment to a vendor? (i.e. money to us)?

Appreciate the help and advise!

    1 reply

    J
    Jelayca V
    February 27, 2025

    All the details you've laid out are much appreciated, BMulholland. Let me clarify how these transactions are handled within the system and connect you with experts who can guide you with your unique setup.

     

    Since referral fees from realtors are considered income, it’s essential to note that when you create an invoice for these amounts, QuickBooks will categorize them as receivables. This means that the referral fee you record will reflect as money owed to you, which can appear on your Accounts Receivable Aging Report.

     

    If your goal is to track these referral fees without impacting your Accounts Receivable, I highly recommend consulting with your accountant. They'll be able to provide you with specific guidance tailored to your business needs, helping you explore alternative methods to record these income transactions while maintaining clear financial reporting.

     

    To track your profitability and help identify trends in income and expenses, you can generate the Profit & Loss report in QuickBooks Desktop (QBDT) and customize it to reflect your specific needs.

     

    The Community is always available if you need further assistance or have new questions about your transactions in QBDT. We're committed to providing support whenever you require it.

      B
      BMulhollandAuthor
      March 1, 2025

      Thank you Jeylaca V!

       

      How do I get connected with an expert?

       

      As a point of clarification:

       

      We want to show this as revenue.

       

      Our main challenges are:

       

      - it is money due to us

      - the money due is not do from our client, its due from a vendor

      - we want to show this on our profit and loss report under the client

      - but the money due should not show up on an AR Aging report as due from the client... 

       

      Is there a way to create an invoice (or something similar) to track money due to us, as money from a vendor, but rolls up under the client (since this money that we are collecting is because of that client account...)?

       

      Thank you again!

      K
      KiazzymaeC
      March 1, 2025

      Thank you for getting back to us, @BMulholland. 

       

      Currently, the feature to select vendors when creating an invoice is not available as invoices are specifically designed for billing customers. If you receive payments from vendors, you might consider recording them through a bank deposit.

       

      For additional guidance and to ensure your records are accurate, we recommend consulting with an accountant. You can find a qualified professional near you by following the instructions in this article: Find an accountant near you.

       

      Thank you for reaching out and please let us know if you have any other concerns regarding your transactions. I'll be here to help you!

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