Full Version: Quickbooks (Tracking Court Ordered Payments)
From: Stunt Engraver (DGL) [#1]
21 Jan 2006
To: ALL
After a long road in court, a person was ordered to pay me a little over $8,000. I'm retrieveing an overpayment to the person.
I couldn't collect the amount, in one chunk, (person claimed extreme hardship) and I agreed to accept $50 per month. (for eternity) :-(
Not knowing how to set this up in Quickbooks, I set the person up as a "customer" so I could track the payments.
This presents two problems:
1. Payments are reflected as income. I've designated payments received as non-taxable income, so that's not a big problem.
2. The outstanding amount puts my receivables totally out of whack.
Instead of tracking receivables, at-a-glance, I have to deduct the court-ordered total from the overall amount, to determine the actual amount of receivables.
Any suggestions?
From: UncleSteve [#2]
21 Jan 2006
To: Stunt Engraver (DGL) [#1] 21 Jan 2006
You will be collecting for 160 months IF they live for 15 years!!!
I would not set this up in your company file. I would create a new company to just track this receivable. Then, on an annual basis, transfer the amount to the business account as miscellaneous income.
You say it is not taxable, but how did you account for the initial expense on the company books? If you used your cost of goods sold account, it reduced your taxable income in the year paid. It, therefore, will be taxable in the years received as it reduces your COGS and increases your profit...
If you want to chat offline (on Skype?), it would be my pleasure.
From: Stunt Engraver (DGL) [#3]
21 Jan 2006
To: UncleSteve [#2] 21 Jan 2006
It wasn't a business transaction.
I'm a sole proprietor and pay all bills from one account, even though business/personal transactions are categorized separately in Quickbooks.
I'll probably set up another company in Quickbooks to track this activity and keep it away from my DGL-related transactions.
Thanks for the suggestion.