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Community Contributor *

Reimbursable expenses

Hello,

 

We are Company Inc who has almost all expenses reimbursed by the other company. How should I record transaction?

Do I record a bill, for instance Travel expense, then create an invoice with  what?

Can I do something as attached file, or this is something different?

Will I have Expenses and income at the end, or I will go to zero because it offsets? 

Thank you!

 

4 Comments
Established Community Backer ***

Re: Reimbursable expenses

Let's break this down into parts.

 

"Will I have Expenses and income at the end, or I will go to zero because it offsets?"

You want the Reporting to show the Net. Not the account details. You want Travel Gross and you want Income gross.

 

"We are Company Inc who has almost all expenses reimbursed by the other company."

 

"Reimbursed" is not the Accounting. It's a Process. Are you describing Sales to a Customer? Did you travel for that customer?

 

"How should I record transaction?"

 

What you show is Accounting. You should be using Items.

 

"Do I record a bill,"

 

You use bill, because you owe that to someone and did not Pay. For instance, the Airline probably had you Pay = enter Credit Credit Card Charge. There is no Bill; the Airline doesn't send you a Bill for you to pay later. Or, you paid by Checking already; that is Enter Check, even if Paperless via Debit card.

 

"for instance Travel expense,"

 

Make Items, if you intend to include Customer Names on the details. Service items for labor is typical; nonivnentory type, for materials such as Supplies or other products you ordered on behalf of that customer name. I use Other Charge Type for Airfare, Lodging, for Shipping, for Postage.

 

Tracking the Customer = direct, and the Billable to them or not is the next Option.

 

"then create an invoice with  what?"

 

When you are ready to Charge them all the Billable costs you incurred, you make Invoice and use Add Time & Costs, to select the Billable charges. If that Travel is part of  Fixed Bid Contra,t then you Job Track it, but that is Not Billable. You will be invoicing them for the Contract Amount they owe you.

 

And Two Sided Item = mark that this is something you incur and charge back. That gives an Expense account link and an Income account link.

 

Example:

 

You hire subcontractors, so the Service Items might be Graphic Artist and Photographer and even Model. They all link to the same one Contract Labor expense account and to the same one Sales Income account.

 

"Can I do something as attached file, or this is something different?"

 

 

So, do not post to Accounts as your image shows. See to the Right of the Blue button for Account? Click on Item. Use that view. Now, you get to include Quantity, you are creating a Cost that will be related to the Sale, you have Item Profit and Job reporting data.

 

Community Contributor *

Re: Reimbursable expenses

Thank you for your reply. Still confusing. 

Community Contributor *

Re: Reimbursable expenses

hank you for your reply. However, I think  my question wasn't clear enough, sorry. 

Let's put it this way. Does reimbursed expenses consider to be income?

We are working on real estate project ,and almost all our expenses are paid back by third-party company.

I understand that at the and, my net will be zero. But should I see my reimbursable expenses on expense part  and  reimbursed expenses as income on my P&L or trial balance?

What I've been doing is :

record/pay bill, click Customer:Job- pick company that I am going to Invoice to.

Then I go toy Create an Invoice-and from the Line Time and Cost for:ABC Company -Expenses, I pick my Bill that I want to get reimbursed for. 

 

This kind of transaction creates offset on P&L or trial balance, so in the end I have Zero- no expense and no income. I believe that it is incorrect.

Established Community Backer ***

Re: Reimbursable expenses

Yes, this is Income. You made a sale: "Does reimbursed expenses consider to be income?"

 

"We are working on real estate project ,and almost all our expenses are paid back by third-party company."

 

That's not enough info. Sorry. For example: We Flip Property, so nothing here is income or expense when working on the property. That costs are invested in the project and accrued as Other Current Asset.

 

"I understand that at the and, my net will be zero. But should I see my reimbursable expenses on expense part  and  reimbursed expenses as income on my P&L or trial balance?"

 

Now you need to talk to your own CPA.

 

If this is expense and income, then you see expense and you see income. I pay for $100 of stamps, and charge that to you. I see on my P&L $100 Expense for Postage and $100 revenue, because I charged you for the stamps. That gives Profit, which might be 0.

 

If this is Property Flipping, the Cost for the subs, materials, permit, etc are Other Current Asset. When the project finally sells, I have Gross Revenue. That means I can "close" Construction in Progress Other Current Asset to COGS (expense). Now I have Profit.

 

"What I've been doing is :

record/pay bill, click Customer:Job- pick company that I am going to Invoice to."

 

Assigning that it is a Direct Cost for that name; charging them or not is your separate decision here. Assigning = Tracking. Billable or not is a Status.

 

Stop using Expense; use Items.

 

"This kind of transaction creates offset on P&L or trial balance, so in the end I have Zero- no expense and no income. I believe that it is incorrect."

 

Yes, that is Very Wrong.

 

Go to QB for Mac:

 

www.qblittlesquare.com

 

take some videos, read some articles, get the Manual while you are there.