customer paid vendor directly - how to ledger payment with showing as income

Hello there, @John F3. To accurately track a project budget when a customer pays a vendor directly, you must record the expense without impacting your actual cash balance or income. This is typically achieved by using a clearing account or a zero-dollar journal entry to reflect the cost within the project.

The way to handle this in QuickBooks Desktop (QBDT) is to use a Clearing Account that acts as a temporary holding spot that allows you to record the expense against the project while immediately offsetting it so your bank balance stays correct.

This can involve creating a Journal Entry as well to record the cost against the project's budget without triggering an income event.

Since this involves the use of correct accounts, I recommend consulting with your accountant.

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