QuickBooks Training Post:

A significant feature in QuickBooks Online (QBO) is the ability to track expenses for a customer so they can be easily invoiced to that customer.

There are a couple of ways to handle the accounting. QBO has several settings that allow you, the QBO user, flexibility in the way you would like to handle these transactions in your QuickBooks file.

Let’s say you incur travel expenses on behalf of a customer and intend to invoice that customer for those expenses.

Those expenses can be credited back to the original expense account where the travel costs were posted. This would result in a net zero expense. 0 travel expense less -0 reimbursement equals zero.

The other option is to have the reimbursement for these expenses post as income.

Click the gear icon. Navigate to Company Settings->Expenses. Click on “Make expenses and items billable” and the above screenshot is what you will see.

For our example today, we’ll select “Track billable expenses and items as income” and “In multiple accounts”.

The multiple accounts selection creates a section on expense and cost of goods sold type accounts (on the chart of accounts) to set the accompanying income account.

Above is a graphic showing the Edit Account window. You can see the highlighted section that allows a new setting.

We’ve checked the box. Yes, we want to use this account for billable customer expenses. When we invoice for those expenses, we want the entry to go to the income account, Billable Expenses Income.

Let’s see how this works.

We create a bill for travel expenses we have incurred on behalf of our customer, Amy’s Bird Sanctuary. We investigate some new design procedures for them or something similar. We intend to invoice Amy’s for this expense.

Note from the arrows that we have used the account we edited for reimburseable expenses, Travel. We have marked the expense as billable. We have specified what customer this is for.

Save the bill and let’s invoice the customer.

From the drawer that displays related transactions for this customer, we choose the billable expense created earlier and add it to our invoice.

Probably, that’s all we need to do and we will save the new invoice.

The bill creates the expense. The invoice creates the income from reimbursement.

Let’s see how that shows up on a Profit and Loss report.

There is the income from the invoice in the income section of our profit and loss report.

 

And there, in the expense portion of our profit and loss is the expense created by the bill.

Hector Garcia, CPA
Certified Advanced QuickBooks ProAdvisor
12401 Orange Drive #136
Davie, FL 33330
954-414-1524
hector@garciacpa.com

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Source: Hector\’s QuickBooks Blog

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