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Create service items for subcontractors, owners, or partners

To track payments and expenses correctly, be sure to create separate service items for subcontracted work vs. work performed by an owner (or partner).

Service items for subcontractors

When you use service items for subcontractors, QuickBooks records expenses and income for the work in separate accounts. You can use such items on both purchase forms and sales forms. You can also create reports that show the profitability of subcontracted work to your business.

Note: If you send 1099-MISC forms to subcontractors, assign the cost of the service item to an expense account that tracks payments to 1099 vendors.

Service items for owners or partners

If you pay owners (or partners) for time worked, you need a service item that records the cost of the work as a draw against equity, rather than an expense.

To do this task

  1. Go to the Lists menu and click Item List. Shortcut

  2. Click Item at the bottom of the list and click New.

  3. Click the Type drop-down arrow and then click Service.

    Important: You cannot change a service item to another item type.

  4. Enter an item name or number.

    What you enter here appears on the drop-down list of items when you are filling out a sales form or purchase order. Enter a name or number that will help you distinguish this item from all the others on the list.

  5. If this item is a subitem of an existing service item, select the Subitem of checkbox and specify the parent item's name. See Creating subitems.

  6. Select the This service is used in assemblies or is performed by a subcontractor or partner checkbox.

  7. Fill in the Purchase Information fields.

  8. Fill in the Sales Information fields.

  9. Click Custom Fields to fill in any custom fields that apply to this item.

  10. Record the item.

See also

KB ID# H_ITEM_CREATE_SERVICE_FOR_SUBCONTRACTOR
9/30/2016 11:56:43 PM
PPRDQSSWS406 9138 Pro 2017 a41835