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Stoney-B
Level 1

Invoicing irregularities

I have a horse boarding business and we invoice customers monthly for boarding.  I bought an item online for one of my customers for her convenience.  It was not related to the business.  She paid me back by adding the amount onto her check payment to me for her monthly boarding invoice.  So She was invoiced for $500 but paid me $550.  How do I edit the invoice to account for her reimbursement to me for the $50, without it being considered an income item.

I do not have a product or service item to account for a reimbursement.  How do I handle this to keep the accounting correct??

Thanks, 

Solved
Best answer December 30, 2022

Best Answers
Rainflurry
Level 14

Invoicing irregularities

@Stoney-B 

 

I'm assuming this is a sole proprietorship  Create a non-taxable service product and select your equity account under 'Income account'.  The equity account is generally "Owner's Capital" for a sole proprietorship (although yours may be called something else).  Then, add that product for $50 to your invoice.  That will increase your equity in the business by $50.  Then, when (or if) you withdraw the $50, assign your Owner's Draw equity account to the payment to yourself.  That will keep the $50 off your P&L and your equity in the business will be the same as before - assuming you pay yourself the $50. 

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5 Comments 5
TirzahC
QuickBooks Team

Invoicing irregularities

Hello, Stoney-B.

 

You can easily record and track billable expenses so your customer can reimburse them when they receive their invoice.

 

You'll need to turn it on from your account settings to use this feature. Then you can apply it to your invoices. Let me walk you through the steps below. 

 

  1. Go to the Gear icon ⚙ and proceed to the Account and settings.
  2. Click the Expenses tab and then go to the Bills and expenses section, select Edit ✎.
  3. Turn on the following:
    • Show Items table on expense and purchase forms
    • Track expenses and items by customer.
    • Make expenses and items billable.
  4. Set all the necessary information.
  5. Select Save.

 

 After that, we can now enter a billable expense.

 

Here's how:

 

  1. Click the + New button.
  2. Choose the transaction (Bill, Expense, or Check) you want to create.
  3. Select the payee.
  4. From the Category column, select the expense account for the transaction.
  5. Enter the description and amount of the expense. Then, select the Billable checkbox.
  6. In the Customer column, choose the customer you want to bill for this expense.
  7. Fill in the other needed fields.
  8. Click Save and close.

 

Then finally, you can add it to the invoice. Here's how: 

 

  1. Tap on the + New button.
  2. Select Invoice.
  3. In the Customer dropdown menu, select the customer you created a billable expense for. This opens the Add to invoice window.
  4. Click Add on the billable expense you want to charge to your customer.
  5. Hit Save and close.

 

For additional details about this process, check out this article: Enter billable expenses.

 

Check out this article for more information about editing, reviewing, and deleting expenses in QBO: Enter and manage expenses in QuickBooks Online.

 

I'm always here if you need more help in recording your transactions. Let me know in the Reply section below. Have a great rest of the day!

Rainflurry
Level 14

Invoicing irregularities

@Stoney-B 

 

I'm assuming this is a sole proprietorship  Create a non-taxable service product and select your equity account under 'Income account'.  The equity account is generally "Owner's Capital" for a sole proprietorship (although yours may be called something else).  Then, add that product for $50 to your invoice.  That will increase your equity in the business by $50.  Then, when (or if) you withdraw the $50, assign your Owner's Draw equity account to the payment to yourself.  That will keep the $50 off your P&L and your equity in the business will be the same as before - assuming you pay yourself the $50. 

Stoney-B
Level 1

Invoicing irregularities

Awesome, that actually makes sense.  

Thanks for both solutions so quickly.

B

FritzF
Moderator

Invoicing irregularities

Hello again, Rainflurry.

 

I appreciate you for always sharing your knowledge about QuickBooks. This will definitely help other users as well in the future. Please keep on posting here in the Community.

 

Keep safe and have a great rest of the day.

AmandaP138
Level 1

Invoicing irregularities

Is there anyway you can dumb this down? I am having the same issue, I really don't want to upgrade to do the billable expenses. 

I found an income account of Owner's Equity, which I am assuming would be "Owner's Capital"? Then who to you assign the Owner's Draw Equity account to paying yourself? That's where I am mostly lost if I did everything else right. 

However, when I also put it on the invoice it asks for the taxes. Now should I just put the full amount and then exempt from Tax, or put the non taxed amount and then put the taxes on..? So new to this. 

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