Advice Regarding Naming Conventions in QuickBooks
Updated: Oct 14
Reporting in QuickBooks has been quirky since I started using the product almost 30 years ago. Please send a "feedback" report to QBO urging them to 'fix' the issue without delay. Your feedback link to QBO engineers can be found on the Gear Icon > Profile.
An error in these naming conventions will produce inaccurate financial statements and could constitute financial fraud.
*Note as of 3/18/2026 this issue has been partially corrected by Intuit depending on the transaction type. You should still use the (c) and (v) notation as described below to specify if the transaction is a debit or a credit.
Advice Regarding Naming Conventions in QuickBooks
Issues with Customer and Vendor Transactions:
Payee field on Bills, Expenses, Checks, Vendor Credits and Purchase orders is a Vendor
Customer field on Invoices, Receive Payments, Estimate, Credit Memos, Sales Receipts, Refund Receipts, Delayed Credit and Delayed Charge is a customer
The problems arise in reporting when using Deposits, Journal Entries and Adjustments:
Name field on a Journal Entry is either, Customer or Vendor but not both. Hence, these transactions remain "unspecified" on reports and in the Customer or Vendor Module without manipulating naming conventions.
Received From field on a Deposit is either, Customer or Vendor but not both. Hence these transactions remain "unspecified" on reports and in the Customer or Vendor Module without manipulating naming conventions to Vendor (c) OR Customer (v) depending on the specific transaction type.
Sales Tax Adjustments and Inventory Quantity Adjustments do not have a field for a customer. Hence, these transactions remain "unspecified" on all reports, and in the Customer or Vendor Modules.
How to effectively enter affected transactions:
For Vendor Refund Deposits: The correct process for return to Vendor is as follows:
Credit Memos to customers for Vendor Credits:
Research if the item being refunded has been invoiced and paid. If not create an invoice from the billable charge now being credited but do not send to your client. Then create a credit memo to the client for the services or products being refunded but do not send. Apply the credit memo to the invoice via make payment (without an actual refund). If the invoice has been paid you will need to process the (credit directly to the clients bank account for the total, if your Marketplace Provider or Facilitator hasn't already done so) This process will reduce the income on your P&L *you will see the option to credit the clients QBO account only or process the credit through their bank account in the payment window, on the left side of the payment screen. Select the appropriate type of invoice process you will be accounting for.
Vendor credits can not be matched in the bank feed but should be used as a place holder credit balance for the particular vendor and A/P or Credit Card Credit (Intuit needs to fix this along with the Vendor list. The vendor list transaction drop down should have "plus deposits" just like the customer list) please submit to Gear Icon > Feedback
When the credit comes through the bank feed, void the vendor credit and apply the deposit directly to billable expense income account on your P&L but be sure you there is not an outstanding A/P balance. Make sure the vendor name is of the name of the Vendor (c). Do not create a bill! The expense has already been processed. (This will reduce the Cost of Goods sold on your P&L) and is a transparent transaction. Verify the inventory and sales tax refunds.
For Journal Entries, you will need to do the same. Either use Vendor (c) or Customer (v) depending on which Chart of Account(s) category and whether the transaction is a debit or credit. Journal Entries can not be utilized as billable expenses. I do not recommend the frequent use.
If you have sales taxes adjustments, these transactions are always "unspecified" on all reports, as there is no field on the transaction for class, customer or location. Hence, they only appear in your sales tax liability register. (This needs to be fixed! Gear Icon > QBO engineers feedback) Nexus is incredibly important.
If you are creating an Inventory Quantity Adjustment for a customer specific item or bundle, the COGS value will be "unspecified" for the customer as there is no customer field on an Inventory Quantity Adjustment transaction and it will not appear in the Customer module or reports. (This needs to be fixed! Gear Icon > QBO engineers feedback) This document should have a customer field and billable selection feature to account for loss of inventory being adjusted.
How to Manage the issue in QuickBooks:
If you are running any report by customer, class or location always filter to "UNSPECIFIED" first to see what could be missing from your balance.
If you are looking for a specific vendor transaction and it is not found in your vendor module, always check the customer list. (v) naming convention.
If you are looking for a specific customer transaction and it is not found in your customer list, always check the vendor list. (c) naming convention.
If you have Vendors that are also Customers and transactions vary, be very careful to correctly apply naming conventions. Use Vendor (c) and Customer (v)
DO NOT USE Transfer transactions as they do not contain class, location, or customer and the transactions have no split field.
DO NOT USE Pay down credit card transactions as they do not contain class, location or customer information and the transactions have no split field.
For rules and recurring transactions be sure the class, customer and location are correct if you are utilizing those reports.
In conclusion
While this issue can cause your vendor and customer lists to become a bit disordered, transactions difficult to find, and reports maybe a bit skewed, following the advice here is a good 'work around'. When time arrives to 1099 your vendors be sure to verify that the naming conventions have been debited and credited appropriately to the particular individual.
If you should have any question, or if you've encountered any other related issues you'd like to add to this list, feel free to contact us. or leave a comment on this post.
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