When your employee pays for the business items and expenses from the personal funds, you need to pay back that amount to her/him. This is known as the process of reimbursement which is basically a non-taxable payment to an employee. In QuickBooks, users can record or enter the expense reimbursement, for employees as well as owners, after or while paying. The process can be carried out with a clear understanding of how to record reimbursed expenses in QuickBooks Online and QuickBooks Desktop. To state in brief, you can use personal funds, checks, etc., for entering them.
How do I Record Reimbursed Expenses in QuickBooks Online?
For adding the expense reimbursement in QBO, you should learn how to enter the business item or expense you have paid for with your personal money. Once you enter the same, you can reimburse it either as an expense or check. Whether you wish to record the reimbursed expenses in QuickBooks Online using personal funds, checks, or expenses, the ideal way depends on your preferences and the information available.
Method 1: With Personal Funds
Assuming that you have paid out for the company’s items using your personal funds, then you have to enter the cost in the accounting software. Doing so, it can be reimbursed later. To begin entering it, you can check the +New menu of QBO. Pick the option Journal Entry to record the amount in debits.
- Go to the “+New” menu.
- Choose the “Journal Entry” option.
- Now, you can pick the expense account given on the 1st line for your purchase.
- After this, move to the “Debits” section to add the purchase amount.
- Switch to the 2nd line.
- Tap on the “Owner’s equity” or “Partner’s equity” option.
- Select the “Credits” section. Add the same amount of purchase.
- Once done, press “Save & Close”.
Method 2: Through an Expense or Check
Regarding the amount you pay as a type of expense, you can include it in two ways in the software. The initial option is to use Expense. In addition, how to record reimbursed expenses in QuickBooks Online can be pursued further with the Check feature. Afterward, you may mention the employee expense amount and save it.
- Tap on “+New” in “QBO”.
- Then, select the “Check” or “Expense” option.
- Now, you can pick the bank account that is used to reimburse your personal funds.
- Move ahead with the “Category” section.
- Select from the options “Owner’s Equity” and “Partner’s Equity”.
- You can add the paying amount and ensure that the changes are saved.
How to Record Employee Expense Reimbursement in QuickBooks Desktop?
A QBDT company file comes with a Billing menu. It is significant for executing processes in relation to bills. Since the expenses incurred by employees can be similar to bills, they can be recorded as reimbursements from this menu. You can specify the name of the vendor as well as the customer’s job. With the amount being added, the method should be finished.
- Launch “QuickBooks Desktop” to open the company file.
- Then, navigate to the “Billing” tab.
- After this, select the vendor name for whom you wish to prepare the reimbursable expense.
- Add the reimbursed amount.
- Choose the appropriate customer job.
- Go to the “Bills” column.
- Proceed to record the employee expense reimbursement in QuickBooks Desktop by mentioning if you are willing to charge the paying amount to the client.
- In case you don’t wish to mention it, you can keep the default settings. Your expense will be reported, however, it will not be charged.
- Should you be willing to charge the customer for your reimbursement, then you have to place the checkmark for this option.
- Once done, choose “Ok”, followed by saving the process.
It can be essential to keep a note of the amount an employee pays on behalf of the company. By maintaining the record of reimbursed expenses in QuickBooks, it becomes accurate for the company to pay it back. With the variety of methods to enter the amount, the chances of accuracy can be improved.