An employee paid a supplier with his own credit card. I need to reimburse the employee and also show the payment to the supplier on the supplier account. Best procedure?

We can record the business expense your employee paid using their personal funds by creating a Journal Entry, @bcschoolsports.

Although we advise against mixing business and personal funds, we recognize that it can occasionally occur.

Here's how to do it:

1. Click the + New button and choose Journal Entry.
2. On the first line, choose the expense account associated with the purchase.
3. Enter the purchase amount in the Debits column.
4. For the second line, select either Partner's Equity or Owner's Equity. Create a specific account if needed.
5. Enter the same purchase amount in the Credits column.
6. Finally, click Save and close.

To record reimbursement, you have two options. We can create an Expense or a Cheque.  

For clear step-by-step instructions, check the Step 2: Decide How to Reimburse the Money section in this article.

Please reply to this post if you have questions about reimbursing your employee in QuickBooks Online (QBO).

Thanks @MoiraskyeT — that’s a great walkthrough!

In professional bookkeeping, this situation comes up quite often — when an employee uses a personal credit card to pay a business supplier. The key is to keep both the supplier ledger and reimbursement record clean and traceable in QuickBooks Online (QBO).

Here’s the process I recommend for accurate accounting and audit clarity 

 Step 1 — Record the Supplier Bill

• Create a Bill under the supplier’s name, categorized to the correct expense or cost of goods sold (COGS) account.

• This keeps Accounts Payable updated, showing the supplier transaction in full.

 Step 2 — Record Employee Payment (Journal Entry)

• Go to +New → Journal Entry
• Debit: Expense or COGS account (reflecting what was purchased)
• Credit: “Employee Reimbursements” (set up as a Current Liability account)
• Add a memo like: “Supplier paid personally by [Employee Name]”

This records the business expense but keeps the reimbursement owed to the employee separate.

  Step 3 — Reimburse the Employee

When reimbursing:

• Use +New → Expense or Cheque

• Payee: Employee

• Category: “Employee Reimbursements” (same account credited earlier)

This clears the liability and properly shows the flow of funds.

  Result:

• The supplier’s account remains accurate under A/P.

• The employee’s reimbursement is fully tracked.

• There’s no double counting of expenses or messy adjustments later.

I’ve used this workflow for multiple clients across Canada, and it aligns perfectly with clean audit trails and CRA compliance.

Anamika Biswas
Executive Director | Cloud Accounting & Tax Services Inc. (CLaTAX)