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Frequent Explorer **

How to handle reimbursement payments for outside work?

We are a golf course that is contracted to maintain the surrounding residential area.  We are paid a monthly fee for the service.  We also purchase items ( flowers, chemicals, mulch, etc) to maintain the landscaping,   I have the monthly fee listed as income.   but how do I handle the other purchases?   We purchase the items and then bill the HOA for reimbursement or my superintendent will purchase the items and then we will have to reimburse him and still have to post it.  I was told to use the income account and then create a cost of goods account to wash it out.

I am lost.  Thanks

2 Comments
Established Community Backer *

Re: How to handle reimbursement payments for outside work?

As you said you can post the cost to a COGS account and include it as income when invoiced and the two will wash out so no additional income will hit the bottom line.  The other alternative is to set up an Asset account and call it something like Billable Expenses.  Set up items for your reimbursable costs and use the  Billable Expense account as the account on the item set-up.  For example, set up an item called mulch and point it to the Billable Expense account.  When you enter a bill or expense, use the items tab instead of the expense tab.  Enter your item (i.e. mulch) and the cost.  Include the customer name on the item tab.  Mark it off as billable.  When you create invoices for that customer, you will be prompted to include billable costs.  Check all that you want to include on the bill.

 

 

 

 

Frequent Explorer **

Re: How to handle reimbursement payments for outside work?

Thank you QBsguru for the help.  I would classify myself as fairly green when it comes to QBs.  I can get around the basics but something like this I need in "first grade" terms.   My corp accountant wanted it where I use the cost of goods.   I have 2 issues that I am trying to understand how it flows in QBs. 

1.  Billing the HOA for the repairs.  Do I create an invoice in QBs for that? How do I make an entry in The HOA cost of goods. How do I handle the payment?  

 

2.   The second is the same as above but with the exception that my super purchased the mulch with his money and I had to reimburse him with a check first to him then I bill it to the HOA and go through the same as above.

 

I am confused on the flow.

 

Thanks