Name types are a QuickBooks function that I use every time I'm in a company file. Differentiating between name types in QuickBooks is something then that I consider a foundation for good bookkeeping. Just like the Simpson's, all
of the names and understanding their roles can get confusing when looking at them as a whole for the first time. But, we're going to break each of them 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 simply forgo using them completely.
1.) Vendor - Vendors are either accessed via the Vendor Center button or by going to Vendors>Vendor Center. Vendors are typically the most commonly used name type in QuickBooks. Any time you pay or receive a refund from a company or person for services this is a vendor. For instance, if Moe was to buy beer from the Duff Beer Company, Duff Beer would be a vendor in Moe's QuickBooks file. Other examples include...
- A company that cleaned your floor
- Purchases of materials from a supplier
- Sub-contracted services that would be considered a 1099
2.) Customer - Customers are either accessed via clicking Customers on the top bar or by pressing Ctrl-J on your keyboard. Customers are people that pay you or your company for goods or services that you've provided.
For instance, in the world of the Simpsons, the Duff Beer Company sells beer to Moe's Tavern. Because a product is sold to Moe's Tavern in exchange for money Duff Beer would consider Moe's Tavern a customer on their books.
3.) Employee - The employee list is either accessed via the Employees button or by going to Employees>Employee Center. You use an employee name anytime a payment is issued that will be associated with a payroll tax. Any time a pay check is written from the Springfield Nuclear Power Plant to Homer, Mr. Burns would have Homer on his books as an employee. I typically see this used incorrectly when an owner pays themselves both through payroll and owner draws.
In this instance I setup two names here to differentiate the two payments. For example if the owner John Smith paid himself $417.50 after tax through a payroll check I would name him 'John Smith' as an employee in QuickBooks. If John Smith withdraws $1,000 through an owner draw I would name him 'John Smith*' as a vendor with an asterisk to differentiate the two. For year-end financial reporting it helps tremendously to differentiate these.
4.) Other Names - You access the Other Names list by going to bottom left of the Chart of Accounts and clicking the Other Names list. This name type is typically one that I do not use at all simply because it won't show up on any vendor reports and for this reason I typically never use it. Some people use this for transfers as it's basically 'invisible' but why waste the time then if it's just a place holder? I go the quicker route and just don't use Other Names. Some folks do get creative by using it for tracking addresses or for using QuickBooks to help track leads from specific persons.
5.) When Not to Use the Above - Sometimes you do not need to associate one of the four name types with a transaction. Here is a list of examples that I typically come across...
- Transfer of funds from one account to another. If you pay your American Express card with the business checking or transfer money from the checking to the savings account there's no need to associate a name type
- Deposits into the bank that do not have a specific associated person. What comes to mind immediately are batch deposits from Visa, MC, and American Express
6.) Quick Tips for Name Types
- Quick Add or Set Up - I use Quick Add unless I need to add additional information to the vendor, customer, or employee. Instances include inputting the pertinent 1099 information if required or inputting an Account No. if QuickBooks Bill Pay is being used
- Merging Name Types - You can easily merge an employee or vendor together by just right clicking the name and editing the name to the correct name already in the lists, this will merge all pre-existing transactions
- Changing Name Types - Changing a Vendor, Employee, or Customer name type can only be done if moving from an Other Name to one of the aforementioned three. The only other options on the table would then be to either delete the name and recreate it under a new name type or make the name inactive and create a new, slightly differentiated name