How Can I Mark a Reimbursable Item as Already Having Been Billed in QuickBooks?
If you own a business that performs a service for your clients, you may need to purchase an item or hire a third party contractor to complete the work. Many times, you'll front the cost as part of your service, and then bill your client for those expenses later, unless they have been built into the final costs from the start. These additional expenses are known as reimbursable item expenses.
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Instructions
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Set up the preferences to allow for reimbursable expenses. Click on the "Edit" button in the top menu bar and scroll down to the "Preferences" option and click it. When the Preferences window opens, locate the "Time and Expenses" option on the left column and click it. Open the "Company Preferences" tab. Locate the section of the window labeled "Invoicing Options." The first option is the box labeled, "Create invoices from a list of time and expenses." The second option is the box labeled "Track reimbursed expenses as income." If there is not a check in these boxes next to the descriptions, click there. If there is, then your company file is set to use reimbursed expenses.
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Create both an income and an expense account for reimbursable items. Click on the "Lists" tab in the top menu bar and scroll down and click the "Chart of Accounts" option. Hold the "Ctrl" and "N" keys to create a new account. In the "Type of Account" box, choose "Expense." In the name window, enter "Reimbursable Item Expenses." Click "Ok." Create a new income account named, "Reimbursed Items."
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Enter the expenses of the reimbursed items first. Click on the "Enter Bills" icon. When the "Enter Bills" window opens, enter the third party vendor or store from which you purchased the reimbursable item from in the top line. If the bill you are entering is for a third party company you have to pay, click on the "Expenses" tab on this screen. Enter the "Reimbursable Item Expenses" into the Account box and the amount of the expense. In the fourth row over from the account box enter the customer or job this expense is for and click into the "Billable" column to make a check mark. If this is an Item you are purchasing, click on the "Item" tab and enter the customer or job and click the "Billable" column.
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Click on the "Invoices" icon on the QuickBooks home page. The side window will open giving you two options. Either "Create Invoices" or "Invoice for Time & Expenses." Choose to invoice for time and expenses. When the Invoice window opens, note that the reimbursable expenses are added to an invoice to be sent or printed.
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Take your customer's money in advance. If the customer pays you for work in advance, or the reimbursable items or expenses are included in your estimate or invoice, when you create the expense record for the payment or purchase of this item, click into the "Billable" column to remove the checkmark here. You will still be recording the purchase as an expense and the received funds as income. Once you have chosen to track reimbursable expenses in the Preferences window, this box will automatically be checked for each customer transaction. Unchecking the box will allow you to count the expense without billing your client twice for the same work or item.
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