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NINABFF
October 11, 2024
Question

Best Workflow for Handling Commission Charges in QuickBooks Online

  • October 11, 2024
  • 1 reply
  • 0 views

Hello everyone,

I’m looking for your advice on setting up a the correct workflow in QuickBooks Online. Here’s the scenario:

 

We act as the seller to a hospital on behalf of our client.
Our client collects the pricing, purchase orders, and relevant details, then sends this information so we can invoice the hospital and collect payment.
Simultaneously, our client invoices us for the same amount.
We then invoice our client for our commission, which is typically 15%.


I’d appreciate any tips on how to efficiently manage these transactions in QuickBooks Online - managing the invoices and tracking the commissions. Thank you!

1 reply

L
LollyNino_C
October 12, 2024

Hi, @NINABFF. Managing commission charges involves a few key steps, and I’m here to help you every step of the way. Let’s go over the three transactions you’ll need to complete. I’m happy to guide you through the details!

 

You'll need to create an invoice for the hospital, a bill from your client, then an invoice to your client for 15% of the sale amount using the commission service item.

 

Beforehand, let's set up the hospital as a customer and the client as both customer and vendor. Since QuickBooks doesn’t allow duplicate names, slightly modify one name (e.g., use “Client - Client1”).

 

To begin with, here's how to create an invoice for the hospital:

 

  1. Go to + New.
  2. Select Invoice.
  3. Enter the other information needed.
  4. Hit Save and close.

 

After that, ensure this bill matches the invoice you created for the hospital. For more detailed guidance, check out the article on entering and managing bills in QuickBooks Online: Enter and manage bills and bill payments in QuickBooks Online.

 

Moreover, create a service item for the 15% commission rate, and add it to your invoice. With this, you'll have to manually calculate the amount.

 

Here's how to create a service item for the commission:

 

  1. Select the Gear icon on the List, then choose Products and Services.
  2. In the Products and Services window, select New.
  3. Select Service.
  4. Enter the service information (you may type in "Commission" on the name field) and click Save and close.

 

Once payments are received, you can manage them using the guide on recording invoice payments in QuickBooks Online. If you use QuickBooks Payments, it will automate this process for you.

 

If you use QuickBooks Payments to process payments, we automate these steps for you. When your customer makes a payment on the invoice, QuickBooks processes the payment and categorizes it.

 

On the other hand, to track sales commissions, you can check this article link: Track sales commissions in QuickBooks Online.

 

Let me know if you have other concerns or follow-up inquiries about managing sales and expense transactions in QuickBooks Online. I'm just around to help. Have a great day!

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