Correct Way to Handle Assigned Invoices

Jun 17, 2005 3 Replies

Intuit couldn't help so I'm hoping someone using Quickbooks can.



Scenario: We sold some software licenses to a customer for £50,000, so we invoiced them for £50,000 (includes sales tax - VAT). We have to buy those licenses from a software distributor and make a small margin, e.g. buy for £48,000 (inc VAT). We raised a PO for £48,000 to the Distributor and they raised an invoice back to us for the same.



Due to the amounts involved, the Distributor wanted the invoice payment assigned to them. So, the customer paid the distributor the £50,000 directly then the Distributor paid us the difference (£2K).



How do I complete the transactions in Quickbooks so that I show a revenue of £50,000 from the customer, costs of £48,000 to the distributor leaving a margin of £2,000 for us?



Any help would be greatly appreciated.



I would create a bank account and name it something like " Customer/Supplier Direct Payment"

You then "receive" the full payment of £ 50K into that account and pay the £ 48K to the supplier from it.

You then journal entry the £ 2K from this account to your real bank account.

This maintans your VAT liability on the £ 50K as opposed to just tracking the £ 2K

Stan

I agree, your method is the simplist, I would modify it slightly and journal out the 2K to undeposited funds (if this account is used).

Thank you both for your help - very much appreciated ... and it worked.

Allan Mart> > On Fri, 17 Jun 2005 13:09:51 +0100, snipped-for-privacy@e-dba.com wrote: > >

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