How to Process an Advance to a Contractor

Let’s say you have a contractor who regularly provides services to your company and she has requested an advance of $200 on her future services. Two weeks later she submits a request to be paid for $400 for services performed.

This post details how to process this scenario in Quickbooks Online . It will meet the following requirements:

  • The advance is reflected as an asset — like accounts receivable — in the company’s books.
  • The advance, once paid back in services, is counted towards reportable income to the contractor on their year-end 1099.
  • The amount of the outstanding advance is visible to the company so when processing the re-payment they know how much is outstanding.

Set Up

  • Holding Account: If you don’t already have one, create an Other Current Asset account named “Contractor Advances.” This account will hold the advance amount. When it’s paid back, this account balance should be 0 for that contractor.
  • Custom Report: Create a Custom Report to display the balances by Vendor. Note: Your contractor is considered a Vendor in QB parlance.
  • This gives you a way to see what balance is left when it comes time to pay the contractor for their services performed.
Click to view sample

Pay Advance to Contractor

  1. Write a check to the Contractor.
  2. In the Category drop-down select the Contractor Advances account.
  3. In the amount enter the advance amount. In our scenario we’d enter $200.
click to view sample


  • A $200 check is written to the contractor.
  • The Contractor Advances Account has a $200 balance and displays on your Balance Sheet as an asset.

Contractor Provides Services Toward Advance

Two weeks later the contractor advises they’ve provided $400 in services.

Let’s assume you’ve forgotten how much you advanced them. To remind yourself, run the Advances to Contractors Report. It will show a $200 balance.

  1. Write a check to the Contractor.
  2. On the first line item, in the Category drop-down, select the account you use to report monies paid to contractors.
  3. In the Amount field enter 400.
  4. On the second line item, in the Category drop-down, select the Contractor Advances Account.
  5. In the Amount field enter -200.00. The net check is now $200.
click to view sample


  • A $200 check is written to the contractor.
  • $400 has been added to the contractor’s 1099 tracking account.
  • The Contractor Advances Account balance is 0.

Stay current with RSS

For a definition of RSS

RSS is a great way to have web content centralized so that when you have catch-up time you don’t have to visit numerous websites. There are many feed readers available and I have chosen to use the extension available for my browser.

To find an RSS feed reader that works for you, Google “RSS feed reader.”

I use the Chrome browser and the RSS Feed Reader plug in.

How to Follow an RSS Feed

Time needed: 5 minutes.

The steps below provide instruction on how to find and follow RSS feed(s) using a Chrome browser and the RSS Feed Reader plug in. This instructions assumes you have already installed both .

  1. Find the content to which you want to subscribe

    If, while visiting a website, you decide you’d like to stay up-to-date with new content, copy the URL. Or, if you don’t know an exact URL

  2. Click the RSS icon found in your Chrome browser

    This opens the RSS Feed Reader window.

  3. Click the + sign in the right corner of the RSS Feed Reader window.

    This step opens the Feed Reader website.

  4. Enter website URL or a search word/term to which you want to subscribe

    In the Search field enter either the URL of a website, or a specific RSS url, or you can enter a search term, or browse curated categories.

  5. Click the Follow button

    Click the Follow button for one or more sites you’d like to follow. The site will take a moment to gather what it needs and, if successful, the button will change to “Following.”

Understanding Invoices

QuickBooks™ Online Invoices update your Income accounts by virtue of the configuration of the Products/Services you select.   To change which Income account is updated you have to go to the Product configuration.  Within the configuration you can select whether to apply the change to historical Invoices as well

Another important concept to understand is that Invoices update Accounts Receivable when created.  Your checking/cash account is updated only when you “Receive Payment” against the Invoice.

Invoice and product explained

How to Review & Edit Transactions Are Posted to the Correct Accounts

Quickbooks Logo
Online Version

Scenario: You want to review all accounts to confirm the transactions are posted to the correct account.

  1. Click Reports.
  2. In the For my Accountant section select Transaction Detail by Account.  The report is generated displaying all transactions by Account.
  3. At the top of the report, confirm the Report Period is correct.  If it isn’t, fix it, then click the Run Report button again.
  4. If you need to move a transaction from one account to another, click the transaction date.  The transaction detail screen opens.
  5. In the Account column, select the correct account.
  6. Click the Save button.  The report is refreshed and re-displayed with the transaction grouped under the new account you selected.

How to Create a Deposit

Scenario: You have a stack of checks to deposit. These instructions assume the following:

  • no Sales Receipts exist, and
  • no unpaid Invoices exist.
Online Version
  1. Click the + in the upper-right corner.
  2. Click Bank Deposit.
  3. Click the Add funds to this deposit heading to expand a grid beneath it for each amount to be included in the deposit.
  4. Select the appropriate value in each column.
  5. Repeat step 4 for each item you have to deposit.
  6. When done, click the Save and Close button.
Bank Deposit

Be sure to select the correct Account so the income is posted properly!

Dynamics – How to Log In

Dynamics is a web-based application, so you log into it from a web browser like Internet Explorer or Google Chrome.  You do not need to install anything.

To Log Into Dynamics

  1. Open your browser.
  2. In the address bar, enter the URL of your Dynamics site.
  3. Enter your user name and password.

Bookmark the location and save it for quick access next time!

Controlling Dynamics Offspring

Dynamics_200If you have a requirement to limit the number of child records possible in a 1:N relationship, the Dynamics Rollup field is a handy way to achieve the restriction.

This solution has three parts:

  1. Two entities with 1:N relationship to each other.
  2. Rollup whole number field on parent entity configured to use the COUNT function which counts the child records.
  3. On create workflow on child entity with a condition to evaluate the value of the rollup field and stop record creation if it exceeds the allowed record count.


To Implement

(1) Create the rollup field on the parent entity.

Data Type = whole number

Field Type = rollup












Click the Edit button to configure the rollup.

You can also add a filter to limit the function to only count child records which meet a specific criteria; like, have a certain eye color.

(2) Create a workflow on the child entity. Configure it to run “on create” and as the very first step evaluate the value of the rollup field.  If it exceeds the number of records allowed, “Stop” the workflow as CANCELLED and configure an error message to display to the user.

note TIP: Add a step to call a forced calculation of the rollup at the end of the workflow.  This ensures it has the correct value at all times.  A plug-in to force a calculation can be found in Dynamics 365 Workflow Tools.

Where to start to seek the truth about U.S. Policy

The 2016 United States election has driven home the need for unbiased, reliable, and truthful sources of information.  We simply can’t sit back and be fed info nuggets from the media giants who are bought and paid for by politicians.  We must be responsible for investing the time and effort to find our own truth so that we can make informed decisions reflecting our personal ideologies and morality.  Not all of us have the luxury of time, so here are some places to start.

This post is a collection of Internet sites which have been suggested as meeting the “smell” test according to me.  It’s as comprehensive as the information I have at the time.  I would like to grow this list, so please submit your suggestion for additions.

Tear up for tear drop

Today is the beginning of our journey with a Littleguy teardrop trailer. “The check is in the mail.”  The order has been placed.  It will be birthed (built) the last week in June with a delivery date scheduled first week in July.