Reimbursable expense paid out of personal funds and how to invoice to customer.

Bookkeeper Amongst Other Things · ‎September 21, 2021

So I am reading a few different ways to handle my clients reimbursable expense paid out of personal funds.

Here is the scenario: Paid for a custom delivery service out of pocket and added to an invoice for reimbursement. However, this was a hand written invoice. I have created an invoice in quickbooks for her, but am a little unclear how to add the billable expense. She has a simple start subscription, so the billable box is not there.

I am thinking add this as a service with the reimbursable expense as the income account. As far as my client paying herself for the out of personal pocket, I thought to just create a liability account with her name and have her pay herself with a check. Am I overthinking this?

RCV · ‎September 21, 2021

Let me help you with this one, Bookkeeper Amongst Other Things.

If you are trying to record business expenses you made with personal funds in QuickBooks Online (QBO), just record first a Journal Entry transaction. Here's how:

Tap the + New Plus icon.
Select Journal entry.
On the first line, select the expense account for the purchase.
Enter the purchase amount in the Debits column.
On the second line, choose Partner's equity or Owner's equity.
Enter the same purchase amount in the Credits column.
Press Save and close.

Then, record the reimbursement as a check. Let me show you how:

Click the + New Plus icon.
Select Check. Or if you're in Business view, follow the steps to switch to Accountant view first. Then come back to these steps.
Choose a bank account to use to reimburse the personal funds.
In the category column, select partner's equity or owner's equity.
Enter the amount to reimburse.
Press Save and close.

When you use a business account to pay for a personal expense, just follow the steps and details in the Pay for personal expenses from a business credit card or bank account article to record the transaction. To learn more about handling personal and business funds, see the Mixing business and personal funds article.

Feel free to visit our Banking page for more insights about managing your bank feed and reconciling your accounts.

You can always update us after performing the steps as I want to ensure this is resolved for you. Just leave a comment below and I'll get back to you. Take care always.

View solution in original post

Giovann_G · ‎September 21, 2021

Let me share more information about this process, Bookkeeper Amongst Other Things.

Yes, it will take into account. You can create a journal entry(JE) to record business expenses paid with personal funds. Then, use a check or expense transaction to record the reimbursement. You can follow the steps provided by my colleague above.

Doing this process won't need you to add the amount to the invoice since you've recorded it separately. I've also included this article for your reference: Pay for business expenses with personal funds.

On the other hand, you can create products and services items for the reimbursement expense if you want to add them to the invoice. Just ensure that you haven't do anything yet to avoid duplicates.

Here's how:

Go to the Sales menu, select Products and Services.
Click New.
Choose Service.
Enter the amount of your service item.
Once done, hit Save and close.

For your reference, you can review this resource for more detailed steps in adding service items: Add inventory products in QuickBooks Online.

Additionally, I've got this material for future reference: Record an invoice payment. Here you can find helpful information to process payment from your customer.

Keep me posted if you still have other questions about reimbursement expenses. I'm more than happy to assist you much further.