There are occasions when clients request you to pay the vendors directly with their credit card account.
There are many ways to do this. Our two most common options:
Specify Only is Yes
Specify Only is Yes
Step 1. Open the item by clicking "Edit"
Step 2. Select the Codes tab at the top
Step 3. The specifier function was developed for the situations when you will "Specify" goods, but not do the actual purchasing. It allows you to create orders but does not expect you to pay the vendor and does not create accounts payable or cost of sales. You will find the option for Specify Only in the Codes tab of each item. It can also be set as a default on the Codes tab of the client's address record.
Specify Only defines if you want general ledger transactions created for Accounts Payable and assumes that you will only charge the client for mark-up (design fee) with no base selling cost.
This option would be used if you do not need to track client payments and you will not have any sales tax liability for the items being purchased.
In this situation, Specify Only should be "Yes" since you are not purchasing this item with your own funds and you do not want the transaction to affect your general ledger.
You can enter a purchase cost but it will not pass through to the selling cost, only mark-up will be calculated. You can create an Order for the item.
Record Payment Receipt From Client
This is a good option if you need to provide a Purchase Order to the vendor and keep track of client payments. This method requires that you record the payment made from your client's credit card as both a payment from a client and a payment to a vendor. The net effect is 0.00 ($50.00 received from client - $50.00 paid to vendor).
Step 1. Create an item (Specifier = No)
Step 2. Create a Cash Account
Step 3. Record a receipt from the client (paid with the client's credit card)
Step 4. Record a payment to the vendor
Create an Item
Create an item just like you would if you were purchasing the goods with your own funds.
Create a Cash Account
Create an account, such as "Client Cash" or "Client Credit Card" in your Chart of Accounts.
Record a Receipt
1. Select Money In.
- Method = Receive and Apply
- Amount = Amount charged to the credit card
- Check # = Direct150520 (this is totally optional, we like a prefix that tells us it was a client payment, then a date (year first) that the payment was initiated)
- Cash Account = Client Cash or applicable account created in step 1.
- Post the payment as you would if you received the funds from the client.
Record Vendor Payment
2. View the Order
- Select Payment (at the top of the order)
- Payment Account = Client Cash or applicable account created in step 1.
- Check # = Direct150520 (same as the client receipt)
- Description - change as desired
- Amount to Pay = Amount charged to the credit card (this should be the same amount as the client payment recorded above)
We recommend that you reconcile the Client Cash Account after both transactions. You can reconcile this account using the Reconciliation screen.
- Select Accounting
- Select Reconciliation
- Select Client Cash Account
The balance on this account should always be $0.00.