Reporting transaction is an important aspect of any business. With clear records in place, the business can function seamlessly without any legal hassle. The companies may use a dedicated team for managing and recording the transactions. This team shall be called the finance or the accounts team.
The resources we use to set up the team and added cost to the organization is huge. To avoid that, the companies have inclined to account for software that shall reduce the operating costs. One of those is called QuickBooks. While using QuickBooks, you may find many name types. Two of those are very important in the accounts; Vendor and Customer.
Vendor vs Customer in QuickBooks
The difference between Vendor and Customer in QuickBooks is, the former is the one who sells a product or a service while the latter is the one that purchases the product sold by the vendor. There shall be instances where the customer shall transit to a vendor as well. In those cases, it is separately reported as vendor and customer, respectively.
A vendor in QuickBooks is the entity that supplies goods or services to the customers. A vendor can be a person or an organization too. The vendor is the entity that you owe money as they have made the products or offered services for you. It is present in the Expense column. QuickBooks offer you to merge or delete the vendor details as and when the data is no longer required.
A customer in QuickBooks is the entity that purchases the goods or uses the services rendered by the vendor. Here again, a customer is a person. This is a transaction that is completely Business to the customer, unlike the Vendor in QuickBooks. You can add the customer column as we add the vendor columns in the software. The best part about QuickBooks is, you can also delete and merge the customer data. Also, you can view the deleted customer as and when you require it.
Comparison Table Between Vendor and Customer in QuickBooks
|Parameters of Comparison||Vendor in QuickBooks||Customer in QuickBooks|
|Definition||The vendor is the party that sells the products or services.||The customer is the party that buys the products or the services.|
|Relationship||The vendor is completely a Business to Business Relationship.||Customer is a Business to Customer relationship.|
|Objective||The vendor’s objective is to sell the products.||The customer’s objective is to purchase the products.|
|Ways to Access||Use the Vendor Center Icon||Use the Customer Center Icon|
|Financial Transaction||Establishes debts||Establishes Profit|
What is Vendor in QuickBooks?
Vendor in QuickBooks is the name type added in the software that sells the product or services. The vendor can be a/an
The entity spends on the raw materials and manufactures the product. Or the entity shall spend and offer the service then claim the charges. This is added as an expense in the QuickBooks. As such, vendor data shows the expense that we have to satisfy by paying. As such, the customer pays for the goods once he/she purchases them.
As we add the data in the QuickBooks, vendor information can be categorized into geographic locations and also industry type. You can also customize it to add the intended date when the product or service shall be provided.
A vendor transaction shall be a piece of important information for an organization as it analyses the total expense for a quarter or a year. The vendor data shall always reduce the monetary asset a company has. It is the funds that must be debited from the company’s bank account.
QuickBooks offer customized services to delete a vendor from the list when the organization is no longer in business with you. If there is any duplicate entry, you can still merge them.
What is Customer in QuickBooks?
Customer is a name type added in the Quickbooks that purchases the goods and services provided by the vendor. It is an entity that can be a person and not an organization. The customer is the party who shall pay for the goods and purchase the same.
The purchases made by the customer determines the profit margin of the company. This data is more crucial as any business shall look to offer the best to the customers as customer satisfaction and retention shall be the prime agenda.
Customer shall spend on the goods, unlike the vendor who spends on making the product. Customer data can be customized as we do it in the vendor area as well. That means to say, we can delete or merge customer data.
This information must be reported clearly as the customer payment shall add to your bank account. This is directly connected with the company’s taxation policies too. Customer payment is a positive aspect of the ledger.
Customer information is equally important, like the vendor data to report and manage. A company shall always strive hard to increase its customer base. The customer acquisition cost is also reported in the vendor list while the customer purchases the goods or uses the service. The payment shall be tallied with the expense incurred for acquisition.
Main Differences Between Vendor and Customer in QuickBooks
- The main difference between the Vendor and Customer in QuickBooks is, the vendor is a name type added to the ledger who produces the goods and sells the same, while the customer is the name type added for a person who purchases the goods produced by the vendor.
- The objective of the vendor list is to track the expense, while the objective of customer data is to track the income and, thereby, the profit.
- The vendor information naturally gives a negative impact as it is debited from the bank account, while the customer information gives a positive impact as the funds get deposited to the bank account.
- The vendor is a business to a business relationship while a customer is a Business to customer relationship.
- The count of vendors shall always be less while the customer base is always more in number.
Tracking, reporting and managing both the vendor and customer data is crucial for any business. The negative impact must be nullified by the customer impact. This must be the objective of any transaction. A company shall strive hard to have a positive outcome during the transaction.
If it is negative, then it is a loss and vice versa. The need for recording such transaction shall help the business owners to make informed decisions time and again. Say, for example, investing in marketing shall become one of the expenses if the management decides to improve sales through digital marketing.