How to log reimbursement for contractor in Quickbooks?

I understand the importance of accurately recording reimbursement transactions in QuickBooks Online (QBO), JeffreyYu18. Let me guide you through the process.

In QBO, we can create an expense account specifically for contractor reimbursement. This will help you track the transactions separately from other expenses.

Here's how:

1. Go to the Accounting menu, and then Chart of accounts.
2. Click the New button.
   
3. Tap Expenses at the top.
4. Under the Save account under dop-down arrow, choose Expenses.
5. Select the Tax form section from the drop-down arrow.
6. Enter the Account name and Description.
7. Hit Save.
   

Once done, let's record the reimbursement transaction in QuickBooks. I'll guide you on how to do it.

1. Go to the +New button.
2. Under Vendors, select Expense.
   
3. Select the contractor's name from the Payee drop-down arrow.
4. Under the Payment account drop-down arrow, choose the credit card account representing her credit card.
5. In the Category column, select the expense account you've created.
6. Enter the amount of the reimbursement field as a negative value. This ensures the transaction acts as a reimbursement rather than an additional expense.
7. Add any necessary notes or memos to the transaction for future reference.
8. Hit Save and close.
   

I also suggest seeking guidance from your accountant to help you choose the right account. It's to ensure that your books are accurate.

We hope this guidance helps you accurately represent the contractor reimbursement in QuickBooks. If you have any further questions or need additional assistance, please don't hesitate to drop a comment below. We are here to support you in managing your finances effectively.

Got it! Thank you!

Thanks for getting back here in the Community space.

We're happy you've got through your current situation with the help of my colleague. It's always our pleasure to assist customers like you using QuickBooks Online (QBO).

If you have any additional QuickBooks-related concerns, we'll help you resolve them on time. Please don't hesitate to visit us anytime. Take care, and have a good one!

Hello, I'm a little confused. The guide says,

"Under the Payment account drop-down arrow, choose the credit card account representing her credit card."

For Payment account, are we putting a credit card account for the contractor (e.g. CONTRACTOR Credit Card") OR are we supposed to put the checking account which we used to reimburse them?

Hello,

I tried to follow your instructions, but I got the following error: 

Enter a transaction amount that is 0 or greater.

It's not letting me upload a negative expense to the Payment Account, Contractor Reimbursement. Thus, how am I supposed to show that it was a reimbursement? 

Hi Jeff,

I'm here to explain the error message you received, and I'll guide you through the steps to fix it.

You'll receive that error when you've entered a reimbursement amount with a negative or zero amount. QuickBooks Online requires reimbursement amounts to be positive values.

To resolve this issue, you need to enter a reimbursement amount greater than zero. Ensure you do not enter a negative value or leave the amount field blank.

If you need to enter a negative amount, I suggest reaching out to your accountant so they can guide you on the best alternative to record the transaction.

I'll also share this article as your guide in ensuring the amounts in your QuickBooks match your real-life bank and credit card statements: Reconcile an account in QuickBooks Online.

You can always mention my name whenever you have concerns about your QuickBooks account.

Hi, I’m a little confused. The original instructions stated to post the reimbursement as a negative amount to ensure it wasn’t viewed as a traditional expense. But now I’m hearing I’m supposed to put in a positive value. Which one is correct? Will putting a positive value cause it to be regarded as a traditional expense?

Thanks for getting back with the Community, JeffreyYu18.

If you've received a refund for a business expense, how it's entered depends on how you record your purchases.

In the event you enter expenses or write checks:
 

1. Confirm you've already created the initial expense or check and assigned a Category/Account to it.
2. Use your + New button, then choose Bank deposit.
3. From the Add funds to this deposit section, enter your amount refunded by the vendor and pick a Category/Account. Your Category/Account should match the one you used on your initial expense or check. If the refund was for an expense you linked with a customer or project, tick your Track returns for customer checkbox, then choose the customer or project. This will prevent your costs from being overstated.
4. In the event you deposited customer payments from invoices into your bank account along with the vendor refund, add them in your Select the payments included in this deposit section.

If you enter bills you plan to pay later:
 

1. Use your + New button.
2. Choose Vendor credit or Receive vendor credit.
3. Pick a vendor from the Vendor ▼ drop-down list.
4. Depending on how you record purchases with this vendor, enter your Category details or Item details. Usually, this is the category, product, or service you're getting a credit for. If you choose an inventory item, QuickBooks will put it back into inventory. In the event your item is defective, or if you don't want it added back to inventory, you can make an inventory adjustment.
5. Select Save and close.

Next, you'll need to apply vendor credits to a bill.

You can also deposit vendor credits or record refunds on credit cards if necessary.

Please don't hesitate to send a reply if there's any additional questions. Have a wonderful day!