Handling checks with two payees I received a question from a contractor about handling a situation that commonly occurs in the construction business. Since I had to apply the same workaround to send a vendor a payment I received from an insurance company, I suspect contractors aren't the only business types to face this scenario, to wit: You are working in a "time and materials" environment. You sell a customer a product or a subcontracted service. The vendor charges $1000.00. You enter the vendor's bill and send the product to the customer (or perform the service). You send the customer an invoice for $1000.00. The check arrives from the customer, and there are two payees: you and the vendor. (If you're in the construction business, and you're a subcontractor, the checks from the general contractor frequently arrive with two payees.) You can't deposit the check in your regular checking account, and then write a check to the vendor, because your bank won't take a check that isn't endorsed by both payees. Here's the solution: Create a fake bank account named "Passthrough Payments" (or something similar). Open a Receive Payments window and pay off the customer's invoice with the check. Be sure to note the check number for later reference. Select the option to deposit the check to a specific account, and select the fake bank account. In QuickBooks, don't use the option to group with other undeposited funds. Select Pay Bills, and choose the fake bank account in the Payment Account field. Select the appropriate vendor bill and use the same check number to pay the bill. Endorse the check and send it to the vendor with a copy of the vendor's bill. The transactions you entered "wash" the fake bank account, so it has a zero balance. If that account shows a balance, you've forgotten to take one of the steps listed here. If it has a positive (debit) balance, you paid off the customer invoice, but you didn't pay the vendor's bill. If it has a negative balance, you paid the vendor's bill, but you didn't pay off the customer's invoice. When you open the account, you can see a history of every check you treated in this manner.