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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! Go to Solution.
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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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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
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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.
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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.)
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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.
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"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."
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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.
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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.
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