How to Record Reimbursed Expenses in QuickBooks?

1. What are Reimbursed Expenses?

Reimbursement simply means to repay the money (someone has paid for you). Similarly, Reimbursed Expenses are given to employees, clients, or other business partners for spending on anything which is business-related. This expense could be for basic expenses such as travel, meals, or hotel bills or, can be for insurance and taxes paid for the company. The concerned employee or client should submit all the valid documents for company-related expenditures, payments, or purchases to become eligible for reimbursement.

A reimbursement is beneficial for a company as this gives them leverage on their tax submission with the IRS. The IRS requires companies to account for every reimbursed expense before any tax benefit is applied. Therefore it is the duty of the company to properly file the date, time, taxes, and description of the expense by the person filing for a reimbursement. 

Concerned parties must save all the expenditure reports with valid documents on a CRM or an accounting tool. Most companies provide reimbursements monthly or once a week, depending on their payroll cycles. Therefore it is necessary that all companies keep good track of all the reimbursement records on their systems. 

Keeping a record of the reimbursements also benefits companies by to geta more insightful knowledge about things like employees’ spending habits, their requirements, etc. to prepare their future Budgets accordingly. For example, a report from MasterCard mentioned that companies have to give the most reimbursements for traveling purposes. With insight like this, they can make more sustainable decisions for the future. 

To carry out a task like this, companies rely on QuickBooks, the most popular virtual Accounting manager capable of advanced Reimbursement tracking options. In this article, we will give the in-depth step-by-step process involved in Recording Reimbursed Expenses in QuickBooks. 

2. Recording a reimbursement in QuickBooks

Recording a reimbursement using QuickBooks is the best practice for any company’s account. Here is a step-by-step guide, 

• Open QuickBooks. Go to the “New” tab on the upper right side of the screen. This should open a dropdown menu. 
• On the list of options, click on “Journal Entry”. This should open a spreadsheet with several transactions. One line saves only a single transaction. 
• Click on the  “Account” Column which opens a dropdown of the connected accounts to your QuickBooks.

(Note: This will list only include the frequently used accounts.) 

• Select the bank account which is used to pay employee expenses.
• To choose the right bank account follow these steps:

1. Open the QuickBooks dashboard.
2. Select the (+) tab in the top right corner.
3. Go to the “Expense” in the drop-down menu.
4. On the account column, select from the list of accounts the appropriate account. 
5. Fill in the description box for the selected account which will help in the future. 
6. Click on the “Save” button.

• On the credits column, feed the reimbursement amount and provide a brief explanation for the expense in the Description column.

(Note: It is a good idea to describe all transactions with all the details. All this will help you to better organize accounts for future use.)

• On the dropdown menu for the “Name” column, choose the employee for which you want to issue the reimbursement amount. 

(Note: All employees who are regularly paid must be there in the dropdown menu. If it is for a new employee, you can type the name manually.)

• Close all the data on the journal by clicking the “Save” button present in the lower right corner of the screen. 
• Once all these are completed, including all other pieces of information like employee name, date, and reason for the expense. Save the Expense at this step

3. Printing invoice for reimbursement

In Reimbursements that are being given to the customers for their purposes, it is sometimes necessary to provide them with a printed invoice. Giving invoices to your customers is also a good idea as this ensures transparency in your business. 

The following steps can be followed to print a Reimbursement invoice:

• Go to the invoices tab present on the QuickBooks home page. 
• Go to the “Customer” tab, located on the top navigation bar on your QuickBooks homepage.
• At this screen, select the “New customer” option which will open a drop-down menu. Once found, find the “Job” tab.
• Add cost by clicking on “Add cost” and, filling in a reimbursement amount. 

(Note: When you don’t want your customers to be charged, use the “Hide” option)

• Fill out all other information on the screen and click OK.
• An invoice will be opened which will be automatically filled out using all the information filled in the previous step.
• Go to “mail the invoice” to send mail invoices. Fill in the customer’s mail ID to send the invoice for the purchase. 
• Properly check all the information on the screen and click on “Send”. All the attached invoices will be received by your customer in their mail.

Also Read: How to fix the QuickBooks Payroll Server Error

Also Read: How to Record Expenses in QuickBooks Desktop