Name types are QuickBooks functions that we use whenever we're in a company file. Differentiating between name types in QuickBooks is something we consider a foundation for good bookkeeping.
When looking at them as a whole for the first time, all of the names and understanding their roles can get confusing.
We'll break each one down and show you how to access these name-type lists, what situations to use them for, how to change them, and even when to forgo using them completely.
Vendors
Vendors are accessed via the Vendor button on the QuickBooks Online Desktop app or by going to Expenses > Vendors in the online version.
Vendors are typically the most commonly used name type in QuickBooks. Any time you pay or receive a refund from a company or person, this is a vendor. Some examples include...
- A company that cleaned your floor
- Purchases of materials from a supplier
- Sub-contracted services that would be considered a 1099
Customers or Clients
Depending on how your QuickBooks is set up, customers or clients can be accessed by clicking the Customer button on the QuickBooks Online Desktop app or going to Sales > Customers (or Clients) in the online version.
Customers are people who pay you or your company for goods or services that you've provided.
Employees
Employee lists can be accessed by clicking the Employees button on the QuickBooks Online Desktop app or going to Payroll > Employees in the online version.
You use an employee name anytime a payment is issued that will be associated with a payroll tax. This is typically used incorrectly when an owner pays themselves both through payroll and owner draws.
For example, the owner, John Smith, pays himself:
- $417.50 after tax through a payroll check. The check would be entered using the Employee's name, John Smith.
- $1,000 through a bank withdrawal; this is an owner draw. Because QuickBooks will not allow the same name to be used multiple times, we created the Vendor name, John Smith*, with an asterisk after the name to differentiate the two. Differentiating these helps with year-end financial reporting.
When Not to Use the Above
Sometimes, you do not need to associate one of the above name types with a transaction.
An example is the transfer of funds from one of your accounts to another.- Paying your business American Express card with your business checking account
- Transfer money from your checking account to your savings account
Quick Tips for Name Types
- + Add New - if the name is new, start typing the name, and a button appears to select from a list of similar names or + Add new. Click + Add new, and a new screen will appear, allowing the choice of the name type and adding additional information like address, bank information for bill/invoice payments, tax IDs for tracking 1099s, and others.
- Merging Name Types - You can easily merge an employee or vendor by editing the name to the correct existing name; this will merge all pre-existing transactions into one.
- Changing Name Types - Changing a Vendor, Employee, or Customer to a different name type is not an option. To differentiate between the different name types, a new name type would need to be created, and an asterisk (*) would need to be added to the end of the name.
