How to record disbursements (charging back the client for the expenses we paid on their behalf)

Hello there,Janda1.

I'm here to guide you on recording a disbursement for the expenses paid on behalf of your clients.

You can make a retainer deposit to track the cash you’ve received from your client. Then you can record the money you spend in which your clients reimbursed you as a reimbursable expense transaction.

Here’s how:

1. Go to the + New icon.
2. Choose Bill.
3. Enter the necessary information. From the Amount column, enter the item and the amount.
4. Click Save & Close.

Once done, you can now add or link the billable expenses to an invoice. To start with, I recommend going to the Sales page and locating the existing entry. Please follow the steps below.

1. Click Sales at the left menu. Then, go to the Invoices section.
2. Find the invoice and click it to expand the page.
3. Press Edit invoice button that appears in the right corner.
4. On the Invoice page, click on the arrow beside the Balance Due.
5. Tap on Add on the billable expense/s under Add to Invoice to add them.
6. Hit Save.

As always, feel free to visit our QuickBooks Community help website if you need tips and related articles in the future.

Please touch base with me here for all of your QuickBooks needs, I'm always happy to help. Have a good one.

Hi Charies, 

We have tried to click the Bill:

We only see: Category, Description, Amount, Billable, customer

We fill the necessary information.

Once we invoice, we were able to add the amount to the invoice. 

However, our main problem is that, we do not want it to show in the report as expense.

We want it to go to "Other Current Asset" or "Disbursement" (not income/not as expense as well)

Welcome back, Janda1.

I'll share additional information about recording the disbursement you paid on behalf of your client.

You'll need to set up an Other Current Assets account. Then, you can create services items and link them to that account so they won't appear under income or expenses. I'll show you how.

Create Other Current Assets:

1. Go to Accounting, select Chart of accounts.
2. Click New.
3. Under Account Type, choose Other Current Assets.
4. In the Detail Type, select the type that best describes the disbursement.
5. In the Name field, enter your desired name.
6. Once done, hit Save and Close.

Create services item:

1. Go to Sales menu, then Product and services.
2. Click New, then Service.
3. Enter your desired service name.
4. In the Income account dropdown, locate the Other Current assets account you've created above.
5. In the Expense account, select the same Other Current assets. See the image below.
6. Once done, hit Save and close.

After that, you can use the service item associated with the Other Current Assets to all your bill or invoices. Also, I suggest reaching out to your accountant. They might have other ways to do it.

Additionally, you can personalize the information displayed on your report. Check out this article for more insights: Customise reports in QuickBooks Online.

Please let me know if you have follow-up questions about recording disbursement. I'll be here to help you.

Hi Janda1, the solution outlined by the moderators makes sense. I've been doing the same thing for my firm, and it's been annoying thus far.

I came across a piece of software that automates the chargebacks/disbursements called Rechargly.com

You can upload the CSVs and it will process the information, price changes and collect payment. You can either manually upload each month, or setup an automation so you don't have to think about it. Pretty sure you can do it for bill.com or other software too.

From a coding perspective, you would code your QBO subs as normal in the P&L, and then the chargebacks would be coded to a revenue code.

Different solution to what's suggested, but worth considering