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Craftygal75
May 6, 2021
Question

Setting up accounts to payout 1099 vendors and charge booth rental

  • May 6, 2021
  • 2 replies
  • 0 views

Hello!

First, I'm using Quickbooks Online - Simple Start. I'm just getting started with QB Online and I am so confused on how to set up the vendors in my boutique and how to do payouts. I have vendors that rent booth space in my store. Say their monthly booth rental is $20. For a given month they make sales of the items in their booth and I payout the amount of their sales minus the booth rental. So if they make $100 in sales, I payout $80 to the vendor. I have the vendors set up as contractors and also as vendors in the expense section (not sure if this is right). Sometimes the vendor makes less than what they owe in rent in a month. So say they make $15 in sales and rent is $20 so they would owe me $5. How do I set up an invoice (or other kind of form) that will show this. I tried using invoices, but it doesn't work if I owe them money. 

 

Second part of my question, what accounts do I use for this scenario? Do I use an expense account to pay the vendors and an income account when they owe me? Or do I use A/P and A/R accounts? I am really struggling with getting this set up right. I'm trying to settle up last month's sales and rent and need to start doing this correctly so I can "fix" the previous months this year and be on the right track. 

 

I have been reading articles and following the community to get my questions answered, but haven't found anything so far. 

 

Thank you!

2 replies

M
Mark_R
May 6, 2021

Hi there, @Craftygal75.

 

I'll help set up vendors in your boutique and record payouts in QuickBooks Online (QBO).

 

First off, let's add your vendor to your QBO file. Here's how:

 

  1. Click Expenses from the left menu, then select Vendors.
  2. Select New vendor.
  3. In the Vendor Information window, enter the necessary details.
  4. Click Save.

 

Once done, let's record the sales and the payouts of the vendor. For this one, you can simply create a sales receipt for the sales they make and an expense for the rental. Let me guide you through the process.

 

To create a sales receipt, here's how:

 

  1. Click the + New button, then select Sales receipt.
  2. Enter the detailed information of the sales.
  3. Then, input the amount ($100).
  4. Select Save and close.

 

For an expense, follow the steps below:

 

  1. Click the + New button, then select Expense.
  2. Input the detailed information of the rental. 
  3. Then, enter the amount ($20)
  4. Select Save and close.

 

After the steps, you can run your Profit and Loss report to show the total amount of your payout ($80).

 

Also, when your vendor makes sales less than the rent, you'll want to create a vendor credit to record what they owe. This way, you can apply the credit if your vendor makes sales more than the rent. For more guidance, feel free to check out this article: Enter a credit from a vendor.

 

Most importantly, I still recommend seeking help from your accountant. They may add suggestions based on what's more suitable for your business and to your books. Also, they can offer you some advice on correct accounts to use based on your second scenario.

 

Please let me know if you need clarification about this, or there's anything else I can do for you. I'll be standing by for your response. Have a great day.

    C
    Craftygal75Author
    May 9, 2021

    Hey!

    This does help, but when I click on new sales receipt it has me put in a "customer" - not a vendor. So do I need to set up my vendors as customers as well? And if that is the case, will info for the 1099s at the end of the year still be tracked?

     

    Thank you!

    Rhonda

    S
    ShiellaGraceA
    May 9, 2021

    Thanks for getting back to us here, @Craftygal75.

     

    I'll share some information about your vendor's rental. Yes, you'll need to set up your vendor as a customer as well. This way, you can create a sales receipt to track your income.

     

    Here's how to do it:

     

    1. Go to Sales. Then, select Customers.
    2. Tap the New customer button at the top and then enter the details.
    3. Click Save.

    When you're ready, follow the steps provided by my peer @Mark_R on how to record a sales receipt.

     

    About 1099, just make sure you mark the Track payments for 1099 box from the vendor profile. See the image below.

     

     

     

     

    Learn more about 1099 in this article: Create and file 1099s using QuickBooks Online.

     

    Feel free to browse this link here in case you need help with other tasks in QBO. Choose a topic that fits your concern.

     

    Please know that you're always welcome to swing by anytime if you still have questions or concerns with vendor transactions. I'll be around for you. Take care and have a wonderful day ahead.

     

     

    L
    lkaybv
    October 25, 2023

    Hi

    Wouldn't  just paying rent separately from the sales be easier,   Just take out the 10% which covers credit cards and sales tax.?  

     

     

     

     

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