Vendors

Any XE "vendors" outside entities to whom you pay money are set up in QuickBooks as vendors. Suppliers come first to mind, but QuickBooks extends the term to include any external entity, that gets your money, including tax collectors. Accounts Payable will accept only vendor names.

Individuals who are validly independent contractors are included. Be aware that some businesses try to avoid taxes by classifying employees as independent contractors XE "contractors:independant" XE "independent contractors" . The IRS is looking, and is armed with penalties. The rules and examples occupy several pages in IRS Publication 937, Employment Taxes.

New Vendors are added, from the List of Vendors, by clicking Vendor then New.

Data entry is essentially the same as in the New Customer window.

Online banking requires complete address, telephone number and account number. 1099-MISC reports are available for vendors, but require inclusion of a zip code in the address, as well as Tax id (EIN or SSN.)

Type is an additional label on the vendor, similar to Customer Types.

Terms will be payment terms XE "terms" agreed between you and the vendor, and may be selected from the list of terms, where the visible text is cosmetic. The numbers behind the text control what happens. The list of terms may be edited under Lists|Other Lists|Terms.

Credit Limit allows QuickBooks to remind you if a bill or purchase order would exceed your limit with this vendor.

For no credit limit, leave this field blank.

To indicate no credit permitted, enter zero.

Tax ID XE "tax id" takes the vendor’s employer identification number (EIN) or social security number (SSN. )

Opening balance is better left unused. QuickBooks does double-entry accounting, so any entry here results in an opposing entry, to undocumented expenses. The more controlled way to enter the opening balance is with a vendor bill for the purpose, described in the Chapter 9.