Billable Expenses reimbursable to another party

Kristen_DBS · ‎December 28, 2020

I use the billable expenses frequently as I often have to pay application and renewal fees on behalf of my clients and then can easily add to their invoice.

Occasionally one of my independent contractors has to pay one of these fees directly, and it is still billable to the client and needs to be included on the client's invoice. So I want to use the billable feature so it can be included on the client's invoice but since the payment is not coming from one of my accounts, how would I set it up? It would seem that the billable expense would be an A/R from the client, but then an A/P to the contractor. I am receiving the payment from the client and turning around and paying it to the contractor but I can't wrap my head around how to make this happen in QB. I tried creating an "Other Current Asset" account as the Payment Account but it gave me the error message "You need to select a different type of account for this transaction." I thought I could enter as a J/E but the billable feature does not show up in the journal entry window.

I am using Quickbooks online for Mac - Quickbooks PLUS

Track expenses and items by customer is ON

Make expenses and items billable is ON

Track billable expenses and items as income is OFF

Thank you!

AlexV · ‎December 28, 2020

Hi Kristen_DBS!

Let me assist you in recording billable expenses in QuickBooks Online.

We can't use an asset account as a payment account that's why you received a "You need to select a different type of account for this transaction." message. It should be a bank or credit card account.

In addition, you can record the fee as a bill and make it billable. Once you received the payment from your client, you can also record the payment to your contractor.

For the bill, simply click the +New button and select Bill. Enter the details and make sure to check the Billable box and select the customer's name under the Customer/Project column. Then, tap Save and close.

Once done, link it to your customer's invoice.

From the + New, select Invoice.
Select the Customer you created a billable expense for. This opens the Add to invoice window.
Tap Add on the billable expense you want to charge to your customer.
Click Save and close.

The next thing you need to do is record invoice and bill payments.

If you have more questions other than billable expenses, please let me know. Stay safe!

View solution in original post

AlexV · ‎December 28, 2020

Hi Kristen_DBS!

Let me assist you in recording billable expenses in QuickBooks Online.

We can't use an asset account as a payment account that's why you received a "You need to select a different type of account for this transaction." message. It should be a bank or credit card account.

In addition, you can record the fee as a bill and make it billable. Once you received the payment from your client, you can also record the payment to your contractor.

For the bill, simply click the +New button and select Bill. Enter the details and make sure to check the Billable box and select the customer's name under the Customer/Project column. Then, tap Save and close.

Once done, link it to your customer's invoice.

From the + New, select Invoice.
Select the Customer you created a billable expense for. This opens the Add to invoice window.
Tap Add on the billable expense you want to charge to your customer.
Click Save and close.

The next thing you need to do is record invoice and bill payments.

If you have more questions other than billable expenses, please let me know. Stay safe!

Kristen_DBS · ‎December 30, 2020

Thank you SO much! :)

Pabz_L · ‎December 30, 2020

Hi there, @Kristen_DBS.

We are happy that we’re able to provide you the answer you need.

Please know that you can always post a comment here in the Community whenever you need guidance or information. We are always here to help you. Stay safe. God bless.

BYGR · ‎August 26, 2022

I have an intermediary company that handles transactions for 2 entities - it is always paying on behalf of. For example I have a $100 legal bill. $25 to company 1 and $75 to company 2 to be paid by intermediary and then reimbursed by company 1 and 2 which are related parties. I want to be able to contra expense the items and have ap with the related party to track easier than duing a bunch of due to due from journal entries. Any way to link to expense account and not income?

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Billable Expenses reimbursable to another party