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cristina2
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

I need advice on how to record a specific type of transaction:

Our company has an outstanding liability to a freight company for services previously rendered. Typically, we would enter the "bill" and use the "bill pay" function to write a check to the vendor on the due date of the invoice. Instead of our company writing a check to 
"said" vendor, one of our employees used their personal credit card to pay the invoice; and, I'm insure of how to post this.

Regarding a reimbursement, we typically write a check directly to the employee. It's usually for something like "lunch" or "stamps"; however, this is a very large dollar amount ($20,000). I want to be able to see the original vendor invoice, but I also need to reimbursement my employee.

Help!

Solved
Best answer December 10, 2018

Best Answers
Lexiesmemere
Level 7

How to record transaction: Employee paid a large vendor invoice with their personal credit card

You can also write the reimbursement check to the employee, but under the Expenses tab use the Accounts Payable account and be sure to enter the vendor's name under the Customer:Job column.

Then go to Pay Bills, check off the $20,000 bill, then click Set Credits toward the bottom of the screen.  The check to the employee should show up as a credit to offset the bill from the vendor.

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51 Comments 51
Lexiesmemere
Level 7

How to record transaction: Employee paid a large vendor invoice with their personal credit card

You can also write the reimbursement check to the employee, but under the Expenses tab use the Accounts Payable account and be sure to enter the vendor's name under the Customer:Job column.

Then go to Pay Bills, check off the $20,000 bill, then click Set Credits toward the bottom of the screen.  The check to the employee should show up as a credit to offset the bill from the vendor.

cristina2
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

That worked beautifully! You're a QB genius!
Rustler
Level 15

How to record transaction: Employee paid a large vendor invoice with their personal credit card

she is that
Lexiesmemere
Level 7

How to record transaction: Employee paid a large vendor invoice with their personal credit card

Oh, blush :smile:
lisacaramandi
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

What if a friend pays the bill but doesn't expect to get paid for it for a very long time? It cannot show up in the bank register since it did not come out of our account. How would I record that kind of transaction?
Lexiesmemere
Level 7

How to record transaction: Employee paid a large vendor invoice with their personal credit card

You can set up a long term (if repayment is more than a year away) liability/loan account for the friend.  "Deposit" the amount into a clearing account (create a bank-type account if you don't already have one), using that loan account under the "from account" column.  Then "pay" the bill, using that clearing account as the bank source.  The balance in the clearing account should be zero, and the liability account will reflect the loan from your friend until it's repaid.
dale-zink
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

Can I also do this in Quickbooks online?  I am having a problem with this, as I cannot select the A/P account under write check.
csturner
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

I see this is old, but for those doing it in QBO here's what I cam up with: do a journal entry. Be sure the bill/voucher for the vendor expense that the employee paid is already in there. Then in the JE debit A/P for the bill paid and be sure to enter the name in the Name column, Credit A/P for the amount and enter the employee's name in the Name column. Make a 'payment' (of 0) for the vendor bill, and pay the employee by check or whatever.
finance5
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

Thank you cturner! I had the exact same problem. All of the solutions on the Community Board talk about an Expenses tab, which doesn't seem to exist in QuickBooks Online. I didn't want to just use a journal entry, but your solution worked perfectly!
office11
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

This is great to reimburse one invoice. If there are 2 or more I cannot do it. It will only accept using A/P once per transaction. Is there another way or do I absolutely have to write one cheque per expense
acheeks
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

cturner I'm using QBO and when I try to save my JE, i get an error saying I can't use A/P with an employee in the name field, only a vendor.  Should I credit Payroll Expenses:Payroll - Wages & Salaries since the employee check with the reimbursement was already recorded (I'm reconciling last fiscal year)?
qbteachmt
Level 15

How to record transaction: Employee paid a large vendor invoice with their personal credit card

It is best to avoid JE for AP, AR, sales, inventory and Payroll. If you have an unpaid bill, create a Vendor Credit (not a JE) and list here that same Vendor. List the account used for the "bill payment" such as Employee Loan. This is not Payroll or wages or salary expense. This has nothing to do with Staff Labor. This is a banking issue.
Rustler
Level 15

How to record transaction: Employee paid a large vendor invoice with their personal credit card

one way is to enter the bill, then use pay bills and pay it - do not print the check

hand write the check payable to the employee

vasolana
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

This-is-so-obvious-how-come-I-couldn't-think-of-it?
Rustler
Level 15

How to record transaction: Employee paid a large vendor invoice with their personal credit card

Been there - done that, don't need the t-shirt
:smile:
acheeks
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

But don't you have to indicate an account as the source of the funds for the bill pay?  Won't doing this take funds from whatever account you specify and throw you out of balance?  I would think it would make the most sense to move the funds paid from Payroll Expenses:Payroll - Wages & Salaries directly to Accounts Payable, but I've been wrong before.
vasolana
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

Mmm, whether I paid the vendor directly or the employee, the account that the check pays from was still going to be my regular business checking account, so that stays the same. And the expense for the bill is still going to be whatever it would have been normally (Office Supplies in my case), so the expense account can stay the same, too, no payroll accounts would or should be involved.

It sounds like you might be trying to get the reimbursement included on their normal paycheck? In which case, yes, it'll be a lot more complicated to make things balance.
acheeks
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

I'm reconciling for last fiscal year, so in the case of checks written outside that period that were cashed in that period, I need to figure out how to move money between the accounts properly without changing anything that was declared on the taxes for the previous fiscal year (does that make any sense? :confused: )

The reimbursement was included on the employee's normal paycheck, but for some reason, the bill payment was recorded on one of the company credit cards.  Since I'm reconciling bank accounts, that transaction can't stay and I remain in balance, so how would I go about retroactively correcting this (I'm sure this isn't the only one of these I'll run into, as I've only gotten 6 months in.)
vasolana
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

Ah, I see. Yeah, this method only works when the reimbursement has not yet occurred,

For your situation, I seem to recall something about making manual journal entries that create a credit in the vendor's account and an amount owed to the employee. I think it still ended with just writing a check, though.
qbteachmt
Level 15

How to record transaction: Employee paid a large vendor invoice with their personal credit card

"I'm reconciling for last fiscal year, so in the case of checks written outside that period that were cashed in that period, I need to figure out how to move money between the accounts properly without changing anything that was declared on the taxes for the previous fiscal year (does that make any sense?"

Just because something cleared or didn't clear, does not apply. You don't Move anything. You issued a check, and whether or not it is cashed is part of Banking, not part of your perspective. You pay my in Nov and I don't cash it until Jan = you Incurred Subcontractor labor in Nov.

"The reimbursement was included on the employee's normal paycheck, but for some reason, the bill payment was recorded on one of the company credit cards.  Since I'm reconciling bank accounts, that transaction can't stay and I remain in balance, so how would I go about retroactively correcting this (I'm sure this isn't the only one of these I'll run into, as I've only gotten 6 months in.)"

You need a Credit Card Credit, and it gets offset to whatever is listed on the payment to the employee, because it appears your expense is entered twice using two different methods.

Or, delete the credit card  charges if it is a Duplicate entry for what was used for the payment to the employee.

Or, edit the employee payment (if this was a check and not a Paycheck), and it should not be Expense; it would be your CC account, to offset that entry error there and remove the Balance from the CC, leaving the details intact.


Don't make a JE. Fix the transactions that are there, or make a proper offset, such as Credit Card "return."
acheeks
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

"Just because something cleared or didn't clear, does not apply. You don't Move anything. You issued a check, and whether or not it is cashed is part of Banking, not part of your perspective. You pay my in Nov and I don't cash it until Jan = you Incurred Subcontractor labor in Nov."

My concern isn't whether or not it cleared, but that the transaction affected that account in the first place.  Since I am reconciling a credit card account, there should be no transactions that I am waiting to clear.  These are expenses, not checks.

"You need a Credit Card Credit, and it gets offset to whatever is listed on the payment to the employee, because it appears your expense is entered twice using two different methods.

I already removed the payment on the credit card account, since this is the only place the payment shows up.  The employee check only shows payroll wages (maybe that was easier for my predecessor) and does not distinguish between wages earned and reimbursements.

"Or, edit the employee payment (if this was a check and not a Paycheck), and it should not be Expense; it would be your CC account, to offset that entry error there and remove the Balance from the CC, leaving the details intact.
Don't make a JE. Fix the transactions that are there, or make a proper offset, such as Credit Card "return.""

If the paycheck was written outside the period I'm working on, I can't fix the check directly and if this bill payment is sitting on the register and never actually occurred there, it throws me out of balance and needs to be adjusted.

I have a lot of what I call sloppy bookkeeping to work through until I can get current.
r1lawrence
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

For QB desktop:

This worked for me:

Create a Reimbursement Account (Other Current Liability). Enter the vendor bill normally (use normal account, amount, customer: job, class). Go to Pay Bills, select the bill in question and click Discount Info. and enter the amount of the vendor bill as a discount and use the Reimbursement Account (the one you created in first step)  - this "pays" the bill" to the vendor. Issue a check to the employee ( or whoever paid the invoice) and use the Reimbursement Account as the account. This pulls the expense through. This process generates a journal entry in Accounts Payable for the Vendor (increase) which is offset by the payment to the employee for the equal amount paid to the vendor (decrease). The net effect is that the Reimbursement account has a zero balance. The expense is shown in P&L associated with the Vendor.

  

Thom17043
Level 1

How to record transaction: Employee paid a large vendor invoice with their personal credit card

I tried to use this option, but am encountering issues. Say the vendor bill is $50 - which I've entered. I go to pay bills, select the bill, enter the $50 in the Discount Info using the Reimb. Account and hit OK. The Amount Due goes to zero. But then if I hit OK in the Pay Bills window, the window closes but nothing happens (still have the bill) and if I go back in the bill is right back where it was with no discount info. Apparently it won't let me discount the entire bill.
qbteachmt
Level 15

How to record transaction: Employee paid a large vendor invoice with their personal credit card

There is no Bill to pay later; someone already paid it. You need to show on the check to reimburse this person, what you are "buying" from them = Reimbursing. If I bring in printer paper and the receipt, you buy Office Supplies from my name. Done.

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