Vendor Pass Through Billing - Expenses or Cost of Goods Sold .. ?

thejbshop · ‎December 18, 2019

Hello Quickbooks Community.

I'm wondering about invoicing a client straight pass through billing (no markup, just my cost) from my vendor. This vendor is in the US and therefore not charging HST, just straight $US amount + exchange rate. (It's an annual digital subscription). My questions are:

1. With no markup, would I enter this as an expense that is then reimbursed by my client via invoice?

2. or Cost of Good sold, even though there is no markup or charge for my service?

3. By law I am required to charge HST from my service, however, since there was no tax charge by the vendor, am I required to charge my client HST for this vendors bill?

Perhaps some of these may be a question for an accountant, however, thought I would try here as it does pertain to my Quickbooks entry. Thank you in advanced.

John

LauraAB · ‎December 19, 2019

Hello John,

It's always good to get a sense of how you should be entering transactions into your books before you go ahead and try to do it. You're right, some of what you've asked, such as whether to charge HST or not, is something better left for an accountant. However, I can let you know how to record the kind of transactions your talking about in QuickBooks. I'll outline for QuickBooks Online and QuickBooks Desktop since you've tagged both in your question.

With what you've outlined above, it sounds like you're referring to billable expenses. A billable expense would allow you to create an expense, check it off as billable, and choose a customer that it would be billed to. Then, you'd create the invoice and add the billable expense to it to charge the customer. This can be used with or without markups, so you're good to go there. One thing you will note in creating an invoice from a billable expense is that it, by default, includes the flat rate plus the PST you were charged as the rate to your customer.

Here are a couple of articles, one for each product, that outline how you can enter this kind of transaction.

Enter billable expenses (QuickBooks Online)
Enter bills (QuickBooks Desktop)

Feel free to go over any of this with an accountant. In QuickBooks Online, connecting with an accountant is as easy as inviting your existing accountant as an accountant user or searching for one using our Find a Pro to Help feature. Both of these options are accessed right in the My Accountant tab in the left menu. For your reference, here's an article with more information about that: Invite or remove an accountant

For QuickBooks Desktop, you can share your company file with an accountant through what's called an Accountant's Copy. I've got a great article that explains this option at length here: Create an Accountant's Copy of your company file in QuickBooks Desktop To find an accountant with QuickBooks Desktop knowledge, you can check out the Find a ProAdvisor website and use your postal code to search for ones near you.

That should get you on your way! Let me know if you have more questions or need clarification for any of that.

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Vendor Pass Through Billing - Expenses or Cost of Goods Sold .. ?

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