If you’ve been using QuickBooks for a while you will probably notice that your list of so-called Vendors is getting long and unwieldy. It probably includes the names of every restaurant and gas station you ever visited and the names of every person and business you paid one time. The bad news is that once a Vendor is in QuickBooks and you have paid them, you cannot delete them. (But you can inactivate them by Right Clicking on the name of the Vendor from the Vendor Center and selecting Make Vendor Inactive).
A better way to manage your payees is by not setting them up as Vendors in the first place. Instead, select Other when you are making a one-time or occasional payment to someone. QuickBooks defaults to Vendor, but you can select Other instead when this Select Name Type screen pops up.
If you can later find that you will be doing business with this payee on a regular basis, you can convert them from Other to Vendor – but you cannot convert a Vendor to Other.
Vendors should be those businesses and subcontractors you buy from regularly. The ones you get regular invoices from and maybe set up Bills for. The ones you want to see in your Vendor List. The ones for whom you will need to issue 1099s, because you cannot issue a 1099 to an “Other.”
How do you know if you will need to issue a 1099? Check out these related posts.