Thanks for the informative video. In your solution, when we are paying an employee as a vendor, specially if the amount is considerable, doesn't it need a 1099 then? Also, is it the same if we are reimbursing a shareholder/partner in a C-corp?
That's how we record expense reimbursements, however, if the employee paid for materials that we regularly get from a supplier, we will not see it on the supplier report of company X. Let's say our company buys lumber from a supplier and there was one payment made from employee's personal credit card. on the supplier report of X company, the transaction will not be there. the transaction will be in the report to the employee because the employee is a supplier in this case, which makes no sense. The employee did not supply the lumber. the employee paid for the lumber. In case if the employee did not have access to the company credit/debit card, and made 10 payments for 10 different purchases that mean the employee supplied all those goods whereas he/she did not. it was just a payment from their personal card and the suppliers are 10 different companies. How can we record payable to the employee for the expenses that come from this supplier? Bill from the employee for the goods from the supplier. Bill payable to the employee, Employee is not a vendor, Employee's credit card is a method of payment. Can we add the Employee's credit card as a method of payment and just record it as paid from this card and then pay off the balance
I like the idea presented by Ufuoma for setting up a separate vendor with a suffix because this allows me to reimburse independent contractors by setting this duplicate vendor as non-1099. However, I also prefer to put the expense/purchase to the actual vendor. My approach for doing this is to add a step using a Reimbursement Clearing Account (type:liability). This allows me to enter as follows: Expense to the actual vendor, use a Clearing Acct as the bank (hopefully you already have one of these for other uses), Date from the actual receipt, First category line is the actual expense account and amount, Second category line is the Reimb Clearing Acct with a description of the employee/contractor name being reimbursed for paying the expense, Amount is negative. This results in a zero balance transaction, but when you see the transaction in the expense gl account it will show the actual vendor. Finally, create the (employee/contractor) bill as shown above using the Reimb Clearing Acct as the category. (You could also have separate line items for separate receipts from various vendors with this approach rather than separate bills for each.) As with any clearing account, check it regularly to ensure is maintains a zero balance.
Hello. This was great. I do not want to cut a check. Instead, I want to reimburse by direct deposit. Can I use the same process? Or is there a different step(s)?
Question to Goshen Accounting Services- Once I received the cheque with the money destined to refund the employees, how should I proceed in QBO? If I do not have a sales receipt or Invoice created for this money to come in?
I am assuming the funds were donated for something like bonuses to employees, correct? If so, you would record the revenue using a sales receipt with the appropriate product/service item. See our revenue video. In your payroll system, pay the funds if it is for bonuses (considered wages). If it is for reimbursement for expense reports, pay with your regular A/P process.
@@GoshenAccountingServices thank you so much! It was actually some kind of donation from the client who we provide services to, for all the employees who paid for the COVID test.
What if the employee expenses needs to be categorized in more than one different category? For example, the employee went on work trip And one of their expenses needs to be categorized as meals and entertainment, the other expense needs to be categorized as travel, and another expense has to be categorized as supplies?
If you are using an outside payroll system and have already entered the expense report as a bill in QBO, you can apply the payment to the bill. If you have not entered a bill and are simply cutting the checks in the 3rd party payroll system, you can attach the receipts to the check "attachment" section inside QBO once the information has synced from your payroll system to QBO. Alternatively, you can store the receipts in your external cloud storage system for compliance record keeping without attaching it to QBO. I tend to use Expensify, Receipt Bank and other receipt tracking apps with QBO bill payment feature to manage employees' reimbursements instead of payroll.
ohhhhhh thank you soooo much for this tutorial! God Blessed u. Been looking around for soooooooo long. 🤩
Love your amount of details in how to enter the bills!! Thanks!
Thanks! Great video.
Do you have a video on how to record in-kind donations?
Thanks for the informative video. In your solution, when we are paying an employee as a vendor, specially if the amount is considerable, doesn't it need a 1099 then? Also, is it the same if we are reimbursing a shareholder/partner in a C-corp?
how do I reimburse mileage for employees?
That's how we record expense reimbursements, however, if the employee paid for materials that we regularly get from a supplier, we will not see it on the supplier report of company X. Let's say our company buys lumber from a supplier and there was one payment made from employee's personal credit card. on the supplier report of X company, the transaction will not be there. the transaction will be in the report to the employee because the employee is a supplier in this case, which makes no sense. The employee did not supply the lumber. the employee paid for the lumber. In case if the employee did not have access to the company credit/debit card, and made 10 payments for 10 different purchases that mean the employee supplied all those goods whereas he/she did not. it was just a payment from their personal card and the suppliers are 10 different companies.
How can we record payable to the employee for the expenses that come from this supplier? Bill from the employee for the goods from the supplier. Bill payable to the employee, Employee is not a vendor, Employee's credit card is a method of payment. Can we add the Employee's credit card as a method of payment and just record it as paid from this card and then pay off the balance
I like the idea presented by Ufuoma for setting up a separate vendor with a suffix because this allows me to reimburse independent contractors by setting this duplicate vendor as non-1099. However, I also prefer to put the expense/purchase to the actual vendor. My approach for doing this is to add a step using a Reimbursement Clearing Account (type:liability). This allows me to enter as follows:
Expense to the actual vendor, use a Clearing Acct as the bank (hopefully you already have one of these for other uses), Date from the actual receipt, First category line is the actual expense account and amount, Second category line is the Reimb Clearing Acct with a description of the employee/contractor name being reimbursed for paying the expense, Amount is negative. This results in a zero balance transaction, but when you see the transaction in the expense gl account it will show the actual vendor. Finally, create the (employee/contractor) bill as shown above using the Reimb Clearing Acct as the category. (You could also have separate line items for separate receipts from various vendors with this approach rather than separate bills for each.) As with any clearing account, check it regularly to ensure is maintains a zero balance.
Hello. This was great. I do not want to cut a check. Instead, I want to reimburse by direct deposit. Can I use the same process? Or is there a different step(s)?
You reimburse by direct deposit in your payroll system. Just push the payments to the accounts payable account to offset the bills.
@@GoshenAccountingServices So it should still be entered as a bill? And again in payroll?
Question to Goshen Accounting Services- Once I received the cheque with the money destined to refund the employees, how should I proceed in QBO? If I do not have a sales receipt or Invoice created for this money to come in?
I am assuming the funds were donated for something like bonuses to employees, correct? If so, you would record the revenue using a sales receipt with the appropriate product/service item. See our revenue video.
In your payroll system, pay the funds if it is for bonuses (considered wages). If it is for reimbursement for expense reports, pay with your regular A/P process.
@@GoshenAccountingServices thank you so much! It was actually some kind of donation from the client who we provide services to, for all the employees who paid for the COVID test.
What if the employee expenses needs to be categorized in more than one different category? For example, the employee went on work trip And one of their expenses needs to be categorized as meals and entertainment, the other expense needs to be categorized as travel, and another expense has to be categorized as supplies?
Add additional lines to the expense transaction in QBO.
I reimburse employees in their paychecks. where do I record/attach the receipts when done this way?
If you are using an outside payroll system and have already entered the expense report as a bill in QBO, you can apply the payment to the bill. If you have not entered a bill and are simply cutting the checks in the 3rd party payroll system, you can attach the receipts to the check "attachment" section inside QBO once the information has synced from your payroll system to QBO.
Alternatively, you can store the receipts in your external cloud storage system for compliance record keeping without attaching it to QBO. I tend to use Expensify, Receipt Bank and other receipt tracking apps with QBO bill payment feature to manage employees' reimbursements instead of payroll.