| There are three ways people try to record | | | | Write Checks/Enter Bills screen, and the Invoice |
| reimbursable expenses in QuickBooks, but only | | | | screen. Fill in the item with the desired COGS |
| two of them should be used. Here are specific | | | | account in the left hand box, and desired revenue |
| details about each, with ideas about which you | | | | account in the right hand box. Fill in other |
| should use. | | | | information as needed. |
| Method 1 - The Expense Tab/Expense Account | | | | Then, when writing checks or entering bills for |
| Method: When recording an expense incurred for | | | | reimbursable expenses, instead of using the |
| the customer, click the Expenses tab from the | | | | Expenses tab, click the Items tab and select the |
| Write Checks or Enter Bills screen. Select the | | | | item just created. Fill in the correct amount, and |
| appropriate expense account, select the | | | | do not place a checkmark the column on the far |
| appropriate customer, and do not check the | | | | right side. Save the transaction. |
| column with the invoice icon above it (also labeled | | | | When invoicing the customer, click the Time |
| "Billable" in later versions of QuickBooks). Save the | | | | Costs button, and the item used above will |
| transaction. You can now generate an invoice for | | | | appear. Select it, and QB places it onto the |
| the customer, and drop the transaction into the | | | | customer's invoice. Save the transaction. |
| invoice after clicking the Time/Costs button. | | | | Behind-the-Scenes Details of this Method: When |
| Behind-the-Scenes Details of this Method: Using | | | | using the item in the Write Checks, Enter Bills, or |
| this method causes the expense account to be | | | | Enter Credit Card Charges screens, the amount |
| credited when the invoice is generated for the | | | | will post to whichever COGS account was chosen |
| customer. This lowers the expense account | | | | when setting up the item. When using the item in |
| rather than increasing a sales/revenue account. If | | | | the Invoice or Sales Receipts screen, the amount |
| users want this - if users do not want the | | | | will post to whichever revenue account was |
| reimbursed expense to be recorded as income, | | | | chosen when setting up the item. |
| then this method should be used. | | | | This is the method to use if you take a markup |
| Method 2 - The Expense Tab/Cost Account | | | | on the reimbursement. It adds the customer's |
| Method: Similar to Method 1, click the Expenses | | | | reimbursement to the revenue, and is the only |
| tab from the Write Checks or Enter Bills screen | | | | method that allows for a gross margin to be |
| when entering an expense for a customer. | | | | determined without creating unbillable "Unbilled |
| Instead of selecting an expense account, select a | | | | Costs." |
| COGS account. Then select the appropriate | | | | This method can be difficult because it takes |
| customer. Unlike with Method 1, notice that the | | | | some thought to get the Item set up correctly. In |
| column along the far right side cannot be checked. | | | | the Edit Item screen, careful attention must be |
| Behind-the-Scenes Details of this Method: It | | | | given to assigning the correct COGS account on |
| creates unbillable "Unbilled Costs." These will show | | | | the "Purchase Information" side, and also to the |
| on the Unbilled Costs report, but when the Time | | | | correct sales/revenue account on the "Sales |
| Costs button is clicked on the Invoice screen, | | | | Information" side. |
| they do not appear in that window. In other | | | | Another reason this method can be difficult is that |
| words, these will remain, forever, on the Unbilled | | | | your company may want to post to various |
| Costs report ,and can never be dropped into a | | | | revenue and COGS accounts for various |
| customer's invoice. Because of this, this method | | | | reimbursable transactions. If this is the case, then |
| should never be used under any circumstances. If | | | | individual Items will need to be established, each |
| it is necessary to post to a COGS account, follow | | | | customized according to the accounts they need |
| Method 3. | | | | to post to. |
| Method 3 - The Items Tab Method: Go to the | | | | Final Thoughts |
| Items list, and create a new Other Charge item. | | | | Most people will probably follow Method 1, but a |
| Click the box that says, "This item is used in | | | | few will want to follow Method 3. If you need |
| assemblies or is a reimbursable charge." This sets | | | | more help to decide, seek professional advice |
| up the item so it can be used effectively on the | | | | from a local accounting expert. |