Reimbursable Expense


J

John Pippy

Hi

Here is the situation. I am reimbursed for transportation costs of $25.00
which is the

I invoice the customer for product of 100 and transportation costs of 25.
Is there a way to set up the item transportation costs so that when I enter
in the amount the P & L will look something like this based on one invoice.


Income
Sales 100
Reimbursed Expenses 25

Total Income 125

Gross Profit 125


Expense
Transportation 25

Total Expenses 25

Net Income 75
 
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D

David Smith

John Pippy said:
Hi

Here is the situation. I am reimbursed for transportation costs of $25.00
which is the

I invoice the customer for product of 100 and transportation costs of 25.
Is there a way to set up the item transportation costs so that when I
enter in the amount the P & L will look something like this based on one
invoice.


Income
Sales 100
Reimbursed Expenses 25

Total Income 125

Gross Profit 125


Expense
Transportation 25

Total Expenses 25

Net Income 75
I guess this is why QB does the math for us, right? A reimbursed expense
can only be a credit to an income account OR a credit to an expense account.
It cannot be a credit and a debit at the same time. The reimbursed expenses
facility is for actually billing expenses that have been incurred and marked
as reimbursable when they are.
 
L

L

John Pippy said:
Hi

Here is the situation. I am reimbursed for transportation costs of $25.00
which is the

I invoice the customer for product of 100 and transportation costs of 25.
Is there a way to set up the item transportation costs so that when I
enter in the amount the P & L will look something like this based on one
invoice.


Income
Sales 100
Reimbursed Expenses 25

Total Income 125

Gross Profit 125


Expense
Transportation 25

Total Expenses 25

Net Income 75
Treating your travel expenses as income the equation is
$125 (gross income) - $25(expense) = $100 Net Income

Looking at it another way
$25 (gross expense) - $25 (reimbursement) = $0 (deductible expense)
$100 (sale income) - $0 (deductible expense) = $100 NET


Your beginning to scare me here, John.

Your previous post wanted to expense 'lost income'. In this post you want to
expense reimbursed items.

I understand the desire to minimize the taxable income - but QuickBooks is
not that 'creative' in accounting.
 
J

John Pippy

Hi L,

In my attempt to simply this example I realized that I may have left some
people confused as even reading it myself now I am left confused.

Forget about the original post.

I am reimbursed an expense of 25 for a transportation cost I incur each
week. This is the exact amount that I pay out and I receive.

How do I set up this as an item to reflect the transaction. When I do it
now and set up the item it asks if it is a reimbursable charge, I click yes.
It then ask for an expense account and an income account (the only income
account I can see it fitting is reimbursable expense)

Now, when I include in on the invoice, it shows on the P & L statement as
Reimbursable Expenses and increases the Total income. It is not taken off
on the Expenses side. This is the part I don't understand, and net income
is increased to the tune of the reimbursable expense.

Any help appreciated
 
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V

vcardx

I think you're missing one step (#1 below) - it will only reflect in
Expenses when you actually PAY (or charge, etc.) the incurred expense.
Setting up a "reimbursable" item just means the recovery is a credit to a
separate (income) account, instead of to the original expense account (which
would otherwise drop to zero each time you invoice for the reimbursable
expense). Either way, the net effect on income is ZERO.

1. When you pay expense:
dr Trans.expense 25
cr Cash 25

2. When you invoice customer:
dr A/R 125
cr Service income 100
cr Trans.exp - reimbursed (income) 25

3. When customer pays you:
dr Cash 125
cr A/R 125

Using 'reimbursable' item, you end with $125 total income and $25 expense
(net $100, which matches your net "cash"). Your Trans.expense will be
exactly offset by the reimbursement income account.
Using item which is not reimbursable, you end with $100 total income and $0
expense (still nets to $100, which is your net "cash").
It just depends how you like to see it.

Hope this helps,
vcardx

: Hi L,
:
: In my attempt to simply this example I realized that I may have left some
: people confused as even reading it myself now I am left confused.
:
: Forget about the original post.
:
: I am reimbursed an expense of 25 for a transportation cost I incur each
: week. This is the exact amount that I pay out and I receive.
:
: How do I set up this as an item to reflect the transaction. When I do it
: now and set up the item it asks if it is a reimbursable charge, I click
yes.
: It then ask for an expense account and an income account (the only income
: account I can see it fitting is reimbursable expense)
:
: Now, when I include in on the invoice, it shows on the P & L statement as
: Reimbursable Expenses and increases the Total income. It is not taken off
: on the Expenses side. This is the part I don't understand, and net
income
: is increased to the tune of the reimbursable expense.
:
: Any help appreciated
:
:
:




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