Hello all,

Not sure if this is the correct place to post this but here goes. I have a customer who regularly purchases from us. Now because of logistics and location etc what he does is deposits lump sums of cash for us to hold on to. Whenever he takes goods we generate the invoice and deduct accordingly. We also assist him with cash disbursments. See the example below;

To note we retail construction materials and he is a contractor. There are times when he will ask us to disburse cash to Person A so they can carry out his purchases etc. Currently I have him set up as a Supplier and when any cash deposit is made I input it as a bill. Then whenever a purchase or a disbursement is made I take it as a 'Receive Payment' inputting the necessary references in the 'Ref no.' section. I know this is not the ideal way to enter this info and would welcome any alternative solutions.

The arrangment works well because this cash injection can be used by us for LPO's and this money is paid back to him 'on demand' either via goods he buys from us or through cash disbursements as described above.

I'm searching for what would be the best way to handle this from an accounting perspective in QBO.

I know in a normal world i would simply assign 'credit' to his account which would then be automatically deducted but because we are also disbursing cash for him i don't think this is possible. 

Looking forward to the feedback. 

Thanks