In addition, by recording reimbursable expenses on the Expenses tab, there is no Item associated with the expense, so they won’t be included on Item-based sales reports, such as the Sales by Item Summary or Sales by Customer Detail reports. If you have a large number of Expense accounts that require matching Income accounts, expect to add a large number of accounts to your Chart of Accounts. The limitation to this method is that you have to create a matching Income account for each Expense account for which you will record reimbursable expenses. If you expect that the description you enter with the vendor bill will appear on a customer invoice, it will be easier to record an accurate description for the reimbursable expense while you’re recording the vendor bill.
You can choose to markup billable expenses by a default percentage or override that default with a different percentage or a fixed dollar amount. The description you record with the vendor bill is the description that will be included on the customer invoice. Click the Save & Close or Save & New button to record the bill. The Billable? checkbox will be selected by default once you enter a Customer:Job. Enter an Expense account for which you’ve matched an Income account and enter a Customer:Job. To use this method after you’ve enabled the preferences and made your account assignments, record vendor bills on the Expenses tab of the Enter Bills window. If you select the preference Track reimbursed expenses as income as shown in the above screenshot and assign a different Income account to each General Ledger Expense account for which you want to track reimbursable expenses, you can record both the expense and revenue associated with reimbursable expenses in different accounts. Method 1 – Record Both the Expense and Revenue Separately With An Optional Markup The first 2 methods record the expense and revenue separately the third method records the revenue as an offset to the expense account. The remainder of the steps to invoice a customer or client for reimbursable expenses depends on the method you choose to account for such expenses. Setting this preference and the role of the other preferences in the Invoicing options block are discussed more fully in our article on enabling automatically invoicing customers for reimbursable expenses. This preference must be set before entering vendor bills for which you plan to seek reimbursement from a customer or client by issuing an invoice. Be sure that under the Invoicing options block, the preference to Create invoices from a list of time and expenses is checked. On the Company tab, click on the Time & Expenses sub menu. Click on the Edit->Preferences menu selection to open the Preferences window. It’s a simpler method used by some firms that bill a customer the exact amount of a corresponding vendor bill and monitor the balance of a general ledger account to track reimbursable expenses for which a customer has not yet been invoiced.įor either method, the first step is to set a QuickBooks preference to enable you to easily create invoices for reimbursable expenses. The second tracks only the net level of expenses for that account. The first approach allows you to track both the revenues and the overall level of expenses for that account it’s the preferred method, especially if you charge customers more than the amount of the corresponding vendor bill. 
record the amount your vendor bills you in an expense account and the amount you invoice the customer or client as an offset to this same expense account. record the amount your vendor bills you in an expense account and the amount you invoice the customer or client in an income account. There are 2 general approaches to account for reimbursable expenses: That means QuickBooks Premier is required to use these methods. 
See our article on the feature differences between QuickBooks Pro and Premier for more information. In addition, note that a key preference setting to enable the approaches discussed in this article is not available in QuickBooks Pro. Your configuration depends on how you intend to account for reimbursable expenses.įor more information on handling reimbursable expenses, see our related articles on enabling automatically invoicing customers for reimbursable expenses, what distinguishes a reimbursable expense from other expenses, removing expenses from the list of billable expenses to be invoiced to a customer, and finding out which reimbursable expenses haven’t been billed to a customer. In order to easily invoice a customer or client for reimbursable expenses, you first need to make sure your QuickBooks installation is properly configured for this task.
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