Reimburse someone who paid part of a bill on their own

georgelam · ‎August 18, 2022

Hello,

I have a bill for a 1099 contractor, and I need to reimburse someone who paid a part of the bill on their own. I need to reimburse them via Melio/billpay, but still show that it was the company that paid the 1099 contractor the full amount. What would be the best way to process this on Quickbooks?

Thanks for your help!

George

Anonymous · ‎August 18, 2022

It’s nice to have you here in the Community, @georgelam.

Let me share some information and guidelines about entering a refund in QuickBooks Online (QBO).

You can reimburse your contractor using your Melio account. What we can do on QuickBooks, we’ll record this reimbursement to write off your Accounts Payable balance. Thus, you’ll want to create a Journal Entry (JE) to do this.

To ensure that your record is accurate, it would be best to consult your Professional Advisor. They can provide detailed information and guide you on what category to choose for Debit and Credit.

Follow the steps below, once you have the details:

Click the New Plus icon.
Select Journal Entry under Other.
On the Journal Entry page, enter the transaction date in the Journal date field box.
Tick the Account field and select Accounts Payable from the dropdown list.
Enter the amount under the Credit column, tab to the Name column, and select the vendor name from the dropdown list.
In the next line, choose the offset account and enter the amount under the Debit column.
Fill in the field boxes and make sure the debits are equal to your credits.
Press Save and close to keep the changes.

I also added this article to learn more about fixing accounts payables (AP) on a cash basis balance sheet: Resolve accounts payable balances on a cash basis balance sheet in QuickBooks Online

Once settled, learn to reconcile your account by referring to this article: Reconcile an account in QuickBooks Online

If you have more queries about reimbursements, you can always press the reply button to post them here. Stay safe!

georgelam · ‎August 19, 2022

Hello RoseJillB,

Thanks for the information about the JE. Would you mind also helping me with the steps for creating the Melio payment? As far as I understand, I can only process a Melio payment by first creating a Bill and then clicking "Save and Schedule Payment". However, when I create a bill here and when I tried to categorize the reimbursement amount as Accounts Payable, I get an error message.

Just to clarify:

I entered a bill from A.
B paid a part of the A's bill on our behalf.
We are reimbursing B for this payment that A received from B.
I need to show that we are the ones who are paying A (since our payment to B is just a reimbursement)

Might you know what's the best way would be to process a Melio payment to B in this case?

Thank you!

George

MaryLandT · ‎August 19, 2022

Allow me to take over and provide clarification about the reimbursement, georgelam.

All bills or expenses are automatically posted to the Accounts Payable (AP) account. Therefore, you shouldn't categorize the bill as AP.

Also, you need to contact Melio first and check with them if you can process reimbursement on their end. You may not be able to reimburse a vendor via Melio within QuickBooks.

If they have the option, all you need to do is enter the reimbursement to QuickBooks. You can either create an expense or enter a bill for this payment. Then, create a journal entry to show that B is paying A.

Upon suggesting this solution, I still suggest contacting your accountant. They can help you select which account to debit and credit. This is to ensure your books have accurate records when recording the reimbursement.

Get back to me if there's anything else you need. Simply click the Reply button below and comment on your questions.

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Reimburse someone who paid part of a bill on their own