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Vendor Owes Us Cid's Uprite 01-17-2007
Posted by Cid's Uprite on January 17, 2007, 6:23 am
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 I have a modeling agency. We sign a model and they go through
development. Development consists of Portfolio $75, CompCards $250,
etc. Some new models pay cash for their development. Sometimes we
sign a model that I think will get a lot of work and I 'front' their
development and deduct it from their pay until the credit is all used
up. I'm not sure how to book this into QuickBooks. I have been
setting the model up as a vendor and when I 'front' their development
charges I enter through the 'Enter Bills' window as a credit and then
when I pay the model for jobs they have worked I deduct the
'development' credits from their pay.

Here's my problem: I have a TON of models that I 'fronted' development
that never worked so there are no earnings to 'eat' up the development
credit. So, I have a negative balance in my A/P register and I want to
'invoice' these models (vendors with a credit balance) and I have no
idea how to do this. I tried to set the models I 'fronted' development
as a Customer, but then when I went to Pay Bills the credit wasn't
there and I kept forgetting to do a journal entry. Does anyone have an
answer for me?

Thank you so very much in advance for any help in this.


Posted by Peter Saxton on January 17, 2007, 4:43 pm
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 wrote:

>I have a modeling agency. We sign a model and they go through
>development. Development consists of Portfolio $75, CompCards $250,
>etc. Some new models pay cash for their development. Sometimes we
>sign a model that I think will get a lot of work and I 'front' their
>development and deduct it from their pay until the credit is all used
>up. I'm not sure how to book this into QuickBooks. I have been
>setting the model up as a vendor and when I 'front' their development
>charges I enter through the 'Enter Bills' window as a credit and then
>when I pay the model for jobs they have worked I deduct the
>'development' credits from their pay.
>
>Here's my problem: I have a TON of models that I 'fronted' development
>that never worked so there are no earnings to 'eat' up the development
>credit. So, I have a negative balance in my A/P register and I want to
>'invoice' these models (vendors with a credit balance) and I have no
>idea how to do this. I tried to set the models I 'fronted' development
>as a Customer, but then when I went to Pay Bills the credit wasn't
>there and I kept forgetting to do a journal entry. Does anyone have an
>answer for me?
>
>Thank you so very much in advance for any help in this.

Get a big sign that says "Do a journal entry".

--
Peter Saxton from London
peter@petersaxton.co.uk

Posted by L on January 19, 2007, 4:05 pm
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>I have a modeling agency. We sign a model and they go through
> development. Development consists of Portfolio $75, CompCards $250,
> etc. Some new models pay cash for their development. Sometimes we
> sign a model that I think will get a lot of work and I 'front' their
> development and deduct it from their pay until the credit is all used
> up. I'm not sure how to book this into QuickBooks. I have been
> setting the model up as a vendor and when I 'front' their development
> charges I enter through the 'Enter Bills' window as a credit and then
> when I pay the model for jobs they have worked I deduct the
> 'development' credits from their pay.
>
> Here's my problem: I have a TON of models that I 'fronted' development
> that never worked so there are no earnings to 'eat' up the development
> credit. So, I have a negative balance in my A/P register and I want to
> 'invoice' these models (vendors with a credit balance) and I have no
> idea how to do this. I tried to set the models I 'fronted' development
> as a Customer, but then when I went to Pay Bills the credit wasn't
> there and I kept forgetting to do a journal entry. Does anyone have an
> answer for me?
>
There are ways to move credits/debits from vendor accounts to customer
accounts. Each vendor who is also a customer is set up with TWO entries --
one for vendor/subcontractor and an additional account for the customer (a
suggestion is to differentiate the name with a designations such as .

When you wish to 'zero out' the negative A/P credits for a particular model,
you will need TWO entries. One entry, to 'use up' the vendor credit in A/P.
The other entry, to 'invoice' the corresponding amount to the customer (A/R
account). TWO entries are necessary because you cannot create a j/e that
references both A/R and A/P. I would suggest that once you have done the
necessary entries for a SINGLE subcontractor/model, that you memorize the
necessary transactions and keep them as a template for use again. You may
even want to consider memorizing the transactions as a group, so that you
will not 'forget' to make a corresponding entry when you 'invoice'.

There are many ways to make the entries. One thing I would strongly suggest
is that you create a 'passthrough' or 'barter' account to use. The balance
in that account should ALWAYS be zero. If the balance is anything other than
zero, you will know that you have forgotten an entry.

If, additionally, you create an item in the item list that refers to the
pass-through account (non-taxable other charge) you will be in a position to
use Customer credit memos as well as journal entries in order to move things
around.

I am away from my QuickBooks program at the moment, but I believe there are
instructions for how to re-allocate in the help file -- not sure of the
topic (barter? Vendors as customers?)

Post back if your stumped. I will take a look at my file when I get back in
the office on Monday.



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