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Sending a Customer’s Payment to Another Vendor in QuickBooks

How to Split a Customer Payment in QuickBooks with Another Vendor

A reader wrote with the following question: "I did work for a customer, and referred other work for this customer to a colleague. We both sent invoices, but the customer sent me a check that included the amount due to both of us, asking me to forward the money due my colleague because she'd lost the invoice with his address. How do I record the amount my company is due in QuickBooks, and send the rest to the other person?"

Go to Receive Payments and receive the amount due from the customer (ignoring, for the moment, the additional money). Be sure you send the payment to the QuickBooks Undeposited Funds account, not to a bank account.

Then open the QuickBooks Make Deposits window, where the customer's payment is already listed. In the next blank line, record the overpayment using an Other Income account. Now your customer record is correct and the bank deposit is correct. Write a check (using Write Checks) to the other service provider, using the same Other Income account you used to deposit the money. (Technically, you should probably post the overpayment to a liability account, because it's money you're holding that isn't yours. However, if you're going to send the check immediately, it probably isn't worth creating a liability account for this purpose because you won't ever be able to get rid of it, since it's a balance sheet account.)

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