[Tullyb13]

I work for a moving company. Sometimes we contract third party drivers to take shipments out of state. Our company picks up the shipment, then we pass it to the other party for delivery. We take partial payment upon pickup, they take the rest of the payment upon delivery. They use that portion as their payment. My issue is how to show that the customer paid the entire balance yet we received partial payment and the third party received the rest. I am working with Quickbooks 2009. I have tried debiting Transportation and crediting A/R, but that doesn't show the third party has been paid. I can credit the third party expense, but what other account would I debit? Any help would be greatly appreciated. I don't know if I am going about this all wrong.
Thanks.

[morgaine300]

You can't credit A/R if you never put it there to begin with. Crediting A/R means you're reducing something you have recorded that someone has owed you. Who owed you if the sales hasn't happened yet?

Since you're "paying" the shipping (by not getting part of what you should for the sales), then you hold legal title to the goods until they arrive. Technically the sale is considered to be on delivery and if you hold title until they get them, then "delivery" isn't until they get it.

But... it's common for sales to be recorded at the time they ship, even if the seller still holds legal title. If that is the way you record all of your sales, at the time they ship, and you stay consistent about it, you can record the entire sale at that time. You can also do that if this is only a small portion of sales and isn't material. Also, the financial statements that really count are the year-end ones. Meaning any differences at year-end may not be significant enough to worry about, especially if you do this consistently.

I'm going to pretend for the moment that it's going to be OK to just record the sale at the time you stick it on the truck. In that case you would Dr cash for what you actually receive, Dr Transportation Out or Delivery Expense or whatever for the amount you don't receive since that's going to the shipper, and cr the entire thing to sales. (If you're doing perpetual inventory, don't forget to also record COGS for it at the same time. If you record the sale, you need to make sure it isn't still in inventory.)

Something that makes me curious though... first how you are getting payment at the exact time it ships. You either already have the check and are hanging on to it, or doing a bank transfer or something. And trying to use A/R is making me wonder also. Are you making any entries related to this transaction before it ships out? That might make some difference.