In every business, you are most likely to encounter situations where you will be required to do the expenses for your business with your personal funds, but it is recommended not to mix business and personal funds. Well, if you still do it you have to record the expenses in your QuickBooks First and then the reimbursement of the expenditure made by the Owner, Partner or an Employee. The reimbursement can be recorded either as a check or an expense.
You can select the method that suits your understanding and your business requirements.
This is the most commonly used method for recording reimbursable expenses, wherein QuickBooks records the amount to be reimbursed as an expense and the expense is transferred to Sales Revenue Account upon Invoicing the customer. Here go the steps below:
This method is referred to as COGS. That calculates the cost of the goods sold during the year and is calculated as COGS = Opening Inventory + Purchase During the period – Closing Inventory. The cost will appear in the Unbilled Costs report that can’t be billed to the customer. This method can be used by the businesses who do not charge the reimbursement expense from their customers. The reimbursement expenses entered using this method can never be billed to the customers. Take a look at the Steps Below.
This method is referred to as “Items Tab Method” and is ideally used in the situations where the markup is added to the reimbursement expense. This method allows the gross margin to be determined without the creation of Unbilled Costs Account. The reimbursement expenses are treated as revenue and billed to the customer later.
In this method the reimbursement expense is entered as an Item in the Bills, Credit Card Charges or Write Checks Screen. The Item is entered in the Expense Account, the reimbursement amount is posted on the Revenue Account that was chosen while setting up the item. The Steps follow underneath:
It is a bit complicated and time-consuming method and few things demand cautious consideration.
These steps will surely help you manage your funds. Dial 1-877-221-952O (Toll-Free) and talk to a QuickBooks ProAdvisor today for technical assistance.