Employee Reimbursement Question




I'm using Office Accounting 2008 Express for my consulting business. I'm the
owner and the only employee.

I just wanted to reimburse myself for some mileage expenses but didn't want
to cut a check out of my checking account. I have an Officer's Loan Account.
This way, I can cut one check for multiple items.

When I used Employee Payments under Employee option and selected the
Officer's Loan Account, it actually deducted the amount from the Officer's
Loan account instead of adding to it. The Officer's Loan Account is a
"Current Liability" account so anytime, I pay for something and post it
against that account, the balance should go up not down as the liability is

Any idea why this is happening? How do I enter my reimbursement transaction
against the officer's loan account -- other than making a journal entry?

I can make a journal entry but that kind of defeats the purpose of the
Reimburesment module, doesn't it?

For Microsoft: I've also noticed that I can't attach documents/links to
reimbursements or journal entries. This doesn't make any sense. I sometimes
have a piece of paper that I scan in to substantiate the journal entry. This
is a must have feature in future versions.




Hi Sam,

If you have an Officer's Loan Account set up as a current liability, it
implies that your company owes the officer money. So, it follows that, if you
(the business) reimburse yourself money, you are reducing the liability
because you are paying some of it off. If you are fronting substantial money
to the business, or taking it out of the business, it would be better to
record amounts to an Owner's Equity account. When you fill out the Employee
Reimbursement form (for expenses), just select different expense accounts in
the grid for your multiple items. BTW - the Employee Reimbursement form is
just a check wearing a different coat. :) Hope this helps.



Thank for your response. You clearly got the idea. I was however, unable to
make the question clear. I was NOT paying myself in which case the Loan
account would be decreased as the company is paying me back. So you are
correct about that.

What I was trying to do was pay the bill from the Loan account. I'm using
the Loan account like a bank account. Because it's a current liability
account, when I pay for something from that account, it should go up not down
as the company's liability is increasing -- in other words, how much the
company owes me is going up.

I don't lend the company large amounts of money. As it's a new business,
sometimes, I put money into the bank account. This goes against the Operating
Bank account and the Officer's Loan Account so that I can track how much
money I put into the company.

Also, if I pay for something with my personal credit card, sometimes I don't
want to deal with small checks here and there. So I want to post it as a bill
and pay it from the Officer's Loan Account. This way, the current liability
goes up and at the end of the month, I cut myself one check to bring it back
to 0.

Hopefully, I was able to clarify what I want to do a little bit more.


Hard to be brief here. :) You can let me know if my guess is wrong again.
1. A bank account and a liability account are on other sides of the coin, so
I'm not sure what you mean by 'I'm using the Loan account like a bank
account'. It sounds like you are recording a bill, charging (increasing)
expenses and crediting (increasing) the Loan account. When you reimburse
yourself, the form debits (decreases) the Loan account and credits
(decreases) your bank. Is that true?
2. I don't think you can accomplish this in MOA by using the Vendor bill
form. It seems to by hardwired to the Accounts Payable system account. The
only way I see doing this is by Journal Entry. Debit expenses for different
items and credit the Loan account. When you use the Employee Reimbursement
form, select the Loan account as the line item in the grid.



You assumption is exactly right. You confirmed my suspicion that I'll have
to make journal entries to handle this situation -- as mentioned in the
original post. Another workaround is to set myself up as a bank account but I
don't like that idea.

Thanks for your help.

Lance [MSFT]

Here's one other alternative, but it may not be any better.

The transfer funds form on the banking menu credits the 'pay from' account
and debits the 'pay to' account. So it can be used instead of the journal
form if you need only two accounts.

For example, I created a 'Reimbursements payable' account, which is a
current liability. If an expense is approved for reimbursement, I open
transfer funds, select the reimbursements payable as the pay from account,
select the expense as the pay to account, fill in the amount and save.

Result: reimbursements payable gets credited (liability increases), expense
balance goes up to match.

Then when I reimburse the employee, I use transfer funds again, this time I
select the bank account I am paying from as the pay from account, and select
the reimbursements payable account as the pay to account.

Result: the liability gets paid off, and the money to pay it comes out of
the bank account.

Hope this helps.




Lance, I don;t see how the last part of your answer would get the
money into the hands of the owner. In fact it seems it would create
incorrect balances. Instead of using transfer shouldn't a check be
issued? There will be no record of who actually was paid for the

Sam, you are limited to the accounts that you may "pay" from. You
could set up a petty cash account and record the "payments" from it.
It would show a negative balance. You will preserve the "name" in the
transaction so you will know who the money actually went to. At the
end of the month, pay yourself and charge the petty cash account back
to zero. You could fund the petty cash account before hand with some
amount that would cover a months worth of expected cash payments if
you don't want to see a negative.

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