Accounts entry for an order where client (overseas) paid direct to exporter’s sub contractor

Hello

in current situation my client an overseas company paid for an order partially to my sub contractor and partially to me. My sub contractor has raised full amount invoice to me.

How should I make accounts entry to settle the payment of the bill where in my client has directly paid to my sub contractor.

 

 

Replies (5)
Quick Summary
This discussion addresses how to handle accounting entries when an overseas client pays your subcontractor directly for an order. The core issue is how to accurately reflect this transaction in your accounts, especially when the subcontractor has invoiced you for the full amount. Guidance is provided on recording the subcontractor's invoice and the payment received from the client to ensure your accounts payable are settled correctly.

To record this transaction, make the following entries:

  1. Record the subcontractor's invoice:

    • Debit: Subcontractor Expense (full amount of the invoice)
    • Credit: Accounts Payable (full amount of the invoice)
  2. Record the payment received from the client:

    • Debit: Cash/Bank (amount paid by the client)
Originally posted by : muhammad malik
opening quote To record this transaction, make the following entries:


Record the subcontractor's invoice:

Debit: Subcontractor Expense (full amount of the invoice)
Credit: Accounts Payable (full amount of the invoice)



Record the payment received from the client:

Debit: Cash/Bank (amount paid by the client)


closing quote

Hello

in this case if we pass the entry as above, will it always show and accounts payable amount to the sub contractor? If yes how can we settle that because this payment has been made to the contractor by client directly.

Wrong

Hi

Can you please guide the right way to do the entry and transaction?

 

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