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How to record a "cost" to pay a subcontractor?

Hi,

One of my electrical subcontractors (ABC Electric) needed their check in the form of a cashier's check, which cost $10. So, on the QB check I made it payable to ABC Electric, with an item for $1,000 Electrical, and then a second and third item for -$10 (negative) and $10 for an item I created, called "Finance Charges".

That way, the $1,000 still gets tracked to Electrical, and I have a charge/credit for the $10 cashier check fee.

Methinks there might be a better way (i.e., correct way) to do it?

Also, I think I only want to report $990 on their 1099, but given the method above, QB generates $1,000 for that vendor...any ideas?

Thanks!

Reply to
Dan
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How much money did the subcontractor receive?

Reply to
Allan Martin

You paid the subcontractor $1000. That's what goes on the 1099. You paid $10 to the bank to receive the cashier's check. That's just an ordinary business expense. Post it separately using the bank as the vendor name. It should not be recorded with the subcontractor's name on the transaction.

Reply to
Laura

If there is one thing I learned in practice is never assume. Telling the OP "You paid the subcontractor $1000." does not make it so.

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Reply to
Allan Martin

Valid point. I originally was going to write..."assuming you paid the subcontractor" but left out the word "assuming".

My point is what ever was paid in total to the subcontractor is what goes on the 1099. It is irrelevant that it cost $10 for the certified check. That does NOT reduce the amount paid or shown on the 1099.

Reply to
Laura

I agree with you.

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Reply to
Allan Martin

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